CFPB Issues Rule for How 2021 Juneteenth Holiday Impacts Closings

August 10, 2021

The Consumer Financial Protection Bureau (CFPB) on Aug. 5 released an interpretive rule to assist the industry in determining whether to treat June 19, 2021, as a federal holiday or a business day for purposes of compliance with certain time-sensitive borrower protection

Because the Juneteenth National Independence Day Act was signed into law two days before the newly created holiday on June 19 (which was a Saturday), it created regulatory compliance questions regarding certain timing requirements for closings.

Per the three-day advanced disclosure rule under the TILA-RESPA Integrated Disclosure rule (TRID) and the right of recission rule under the Truth In Lending Act (TILA), federal holidays are not typically treated as a business day for the purposes of counting those periods. However, the late creation of the holiday, upended much of those calculations. Under the interpretative rule, to determine whether June 19, 2021, counts as a business day or federal holiday depends on when the relevant time period began. If the relevant time period began:

  • on or before June 17, 2021, then June 19 was a business day.
  • after June 17, 2021, then June 19 was a federal holiday.

Additionally, the interpretive rule explains that creditors are not prohibited from providing longer time periods than required, so if a time period began on, or prior to, June 17, 2021, creditors could still treat June 19, 2021, as a federal holiday. This should help lenders and quality control providers as they look to sell the loans closed around the holiday on the secondary market.

“The federal recognition and celebration of Juneteenth was a welcome and important step toward healing the national legacy of slavery,” said CFPB Acting Director Dave Uejio. “We understand that the quick enactment of the federal Juneteenth legislation created interpretive questions and compliance challenges for the mortgage industry with respect to rescission of closed-end mortgages and certain time-sensitive mortgage disclosures. The mortgage industry can refer to today’s interpretive rule when determining how to treat June 19, 2021.”

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