TIP: Last year, June 19 was designated as a federal national holiday, “Juneteenth National Independence Day.” It was the first new national holiday instituted since 1983. How will this new holiday impact mortgage disclosure regulations that are tied to “business day” time periods?
A little background – under TRID, generally, the credit union is responsible for ensuring that it delivers or places in the mail the loan estimate (LE) no later than the third business day after receiving the member’s application. Further, the credit union must ensure that the borrower receives the closing disclosure (CD) at least three business days before consummation of the transaction. For details, see The League’s ii Release No. B079 – TILA-RESPA Integrated Disclosure Rule. In addition, for certain refinancings, Regulation Z permits the borrower to rescind the transaction within three business days after consummation. See The League’s ii Release No. B036 – Reg. Z – Right of Rescission.
Since June 19 falls on a Sunday this year, some credit unions will be closed on Monday, June 20, in observance of the holiday. For purposes of providing the LE, a business day is a day on which the creditor’s offices are open to the public for carrying out substantially all of its business functions. Thus, whether Juneteenth is a “business day” for Loan Estimate purposes depends on whether the credit union’s offices are open. For example, if the credit union receives an application on Saturday, June 18, 2022 and it is closed on Monday, June 20 in observance of the holiday, the credit union will have until Thursday, June 23, 2022 to mail or provide the Loan Estimate and initial disclosures.
However, the term “business day” is defined differently for other purposes, such as counting days to ensure the borrower receives the CD on time and the borrower’s exercise of the right to rescind the transaction. For these purposes, “business day” means all calendar days except Sundays and the legal public holidays specified in 5 U.S.C. 6103(a): New Year’s Day, the birthday of Martin Luther King, Jr., Washington’s birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day, and Christmas Day—and now Juneteenth. For residential mortgage transactions that are anticipated to close around the holiday, if the credit union is observing Monday, June 20 as a holiday, for purposes of the Closing Disclosure and the right of rescission periods, the observed holiday is treated as a business day.
Many financial institutions, county register of deeds offices, and title companies will be closed Monday, June 20. However, some entities have yet to make a determination or have opted not to close this year. It’s important for the credit union to plan accordingly to keep your mortgage closings running smoothly.