So, if this article looks familiar, that’s because we sent out a similar version in the past two years and there is still some confusion as some institutions are open and some are closed.
On June 17, 2021, the US got its first national holiday in 38 years. June 19 has been designated as “Juneteenth National Independence Day”. Martin Luther King Jr. Day, the third Monday in January, was instituted in 1983.
So, what’s different about these holidays and why does it affect me? Well, besides recognizing the end of a terrible time in American history, we have a new day that will be impacted for rescission purposes and disclosure delivery under Regulation Z.
June 19th is treated like any “actual date” holiday such as New Year’s, Independence Day, Veterans Day and Christmas. The holiday is only on that date and not the date observed, at least, for our purposes (even though Regulation Z itself has not been updated, the definition referred to in 5 USC 6103(a) has been updated).
For the Precise definition of a business day (all calendar days except Sundays and federal holidays), there are no additional days factored in when determining business days. Many institutions will be closed on Monday June 19, 2023 for observance of the holiday. This date is not considered a business day for the Notice of Right to Cancel and delivery of the Closing Disclosure. Here are a few examples:
- If you close on a Refinance transaction subject to Regulation Z on June 15, 2023, the Right to Cancel expires June 20, 2023, and you may pay out the proceeds on June 21, 2023.
- If you mail a Closing Disclosure (without borrower receipt) on June 15, 2023, the Closing Disclosure is deemed received on June 19, 2023 and the closing may occur on June 22, 2023.
- If you hand deliver or email a Closing Disclosure (with borrower receipt on the same day) on June 15, 2023, you may close the loan on June 19, 2023 if you’re open, June 20, 2023 if you are not.
The Precise definition of a business day also applies to borrowers receiving Escrow Cancellation Notices when applicable, as well as delivery of initial disclosures or placing them in the mail no later than the seventh business day before signing.
For the Standard definition of a business day (days we are open for business) if your Bank closes on June 19, 2023 this is not considered a business day. Therefore, when providing Loan Estimates and other initial disclosures, you do not need to count this day as a business day. For example, if you receive an application on June 15, 2023, you have until June 21, 2023 to mail or provide the Loan Estimate and initial disclosures. If your Bank is open, then this would be a business day for your institution.
Remember: Independence Day (Tuesday, July 4, 2023) is treated just the same as Juneteenth. The actual day is the holiday.
When it comes to appraisal delivery under Regulation B, the business day definition is not defined but it is a good practice to send the appraisal at least three precise business days before signing to make sure the borrower has adequate time to review the appraisal.
We are ½ through the year – have you scheduled all your compliance engagements? Contact us at [email protected] or (800) 934-7347 for your compliance, BSA and Fair Lending needs.
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