So, if this article looks familiar, that’s because we sent out a similar version last year when there was so much confusion with the timing of the signing of the law, but the information is still the same. (The dates have been updated, as applicable.)
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, and for check holds under Regulation CC.
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.
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 20, 2022 for observance of the holiday. These dates, however, will be considered business days 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 16, 2022, the Right to Cancel expires June 20, 2022, and you may pay out the proceeds on June 21, 2022.
- If you mail a Closing Disclosure (without borrower receipt) on June 16, 2022, the closing may occur on June 23, 2022.
- If you hand deliver or email a Closing Disclosure (with borrower receipt on the same day) on June 16, 2022, you may close the loan on June 20, 2022 if you’re open, June 21, 2022 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 20, 2022 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 17, 2022, you have until June 22, 2022 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.
This also applies to Regulation CC for check holds. While the definition in Regulation CC for business day isn’t as convoluted as Regulation Z, it does say that if any of the holidays falls on a Sunday, the next Monday is not a business day.
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.
TCA has A Better Way to keep you in the know and up to date. Contact us at [email protected] or (800) 934-7347 for your compliance, BSA and Fair Lending needs.
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