Second public holiday on June 16 raises tricky compliance issues | Alston & Vogel – Low Calorie Diets Tips

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The second observance of the June 16 (National Independence Day) holiday is Monday, June 20, 2022. President Biden signed legislation last year making the 16th National Independence Day a federal holiday. Since the designated holiday falls on a Sunday, the second observance of June 16 raises tricky compliance issues for the timing of certain disclosures related to residential mortgage transactions.


Under the Truth in Lending Act (TILA) Real Estate Settlement Procedures Act (RESPA) Integrated Disclosure Rule (TRID), the lender is generally responsible for ensuring that it issues the Loan Estimate (LE) no later than the third business day after receipt of the consumer’s application . In addition, lenders must ensure that the consumer receives the Closing Disclosure (CD) at least three business days before the transaction is completed. In addition, for certain funding, Regulation Z allows the consumer to reverse (cancel) the transaction within three business days of completion.

For purposes of providing the LE, a business day is a day on which the creditor’s offices are open to the public to carry out substantially all of its business functions. However, the term “business day” is defined differently for other purposes, such as B. counting days to ensure the consumer receives the CD in a timely manner and exercising the consumer’s right to withdraw from the transaction. For these purposes, “Business Day” means all calendar days except Sundays and the legal holidays set forth in 5 USC 6103(a): New Year’s Day, Martin Luther King, Jr.’s Birthday, Washington’s Birthday, Memorial Day, Independence Day 16, Labor Day, Columbus Day , Veterans Day, Thanksgiving Day and Christmas Day.

Last year Juneteen fell on a Saturday, causing confusion because President Biden signed the holiday into law just two days earlier, on June 17, 2021. In particular, Commentary 2(a)(6)-2 of the Official Staff Commentary to Regulation Z notes that if one of the federal holidays (e.g. July 4th) falls on a Saturday, federal agencies and others may observe the holiday on preceding Friday (July 3rd). In these cases, the public holiday under consideration (July 3rd in the example) is a working day. By this logic, in 2021, the observed June 16 (Friday, June 18) was a “business day” and the actual declared holiday (Saturday, June 19) was the “holiday” for CD and CD wait time purposes right of withdrawal .

However, to clear up some of the confusion caused by the hasty proclamation of the new holiday, the Consumer Financial Protection Bureau (CFPB) issued an interpretative rule on August 5, 2021, stating for purposes of the June 16, 2021 holiday that “for the cancellation of closed mortgages and TILA-RESPA Integrated Disclosures, whether June 19, 2021 counts as a business day or a federal holiday depends on when the relevant period began. If the relevant period began on or before June 17, 2021, then June 19 was a business day; after June 17, 2021, June 19 was a federal holiday.”

The official comment does not go into a scenario in which the actual federal holiday falls on a Sunday, but is celebrated on a Monday. According to Bankers Online’s website, the Consumer Financial Protection Bureau has stated that when a fixed date holiday falls on a Sunday but is observed on a Monday, the observed holiday (e.g. June 16 observed June 20, 2022) is in cases where the more specific rule applies, one business day.

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With residential mortgage transactions expected to close in the coming week, it is important that lenders allow for the actual holiday of June 16 (June 19-20 treated as a “Business Day”) and sufficient time for the Borrower has the right to revoke the transaction. If a creditor’s offices are open to the public to carry out substantially all of its business functions on the observed holiday June 16 (June 20), June 20 should be included as a business day for the purpose of providing the LE.

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