On June 17, 2021, President Joe Biden signed the Juneteenth National Independence Day Act, solidifying June 19 (Juneteenth) as a federal legal holiday. This bill affected certain Regulation Z timing requirements related to rescission of closed-end mortgage loans and Truth in Lending Act–Real Estate Settlement Procedures Act of 1974 (TILA–RESPA) Integrated Disclosures, also known as TRID, for transactions that:
- Closed on or prior to June 17, 2021, but consumers’ rescission period had not expired; or
- Were close to the planned closing date of June 17, 2021, and subject to certain disclosure timing requirements of TRID provisions of Regulation Z.
On Aug. 5, 2021, the Consumer Financial Protection Bureau issued “12 CFR Part 1026—Truth in Lending (Regulation Z); Impact of the 2021 Juneteenth Holiday on Certain Closed-End Mortgage Requirements” as an interpretive rule on how to remediate this issue. Highlights from the rule include:
- In the context of the 2021 Juneteenth federal holiday and the affected closed-end rescission and TRID provisions, if the relevant time period began on or before June 17, 2021, then June 19, 2021, is a business day for purposes of the specific business day definition. If the relevant time period began after June 17, 2021, then June 19, 2021, is a federal holiday for purposes of the specific business day definition.
- If the rescission period began on or before June 17, 2021, for purposes of determining the rescission period and the disclosed rescission period expiration date, Saturday, June 19, 2021, is a business day notwithstanding the addition of Juneteenth as a federal holiday.
- Creditors must deliver or mail the loan estimates to consumers no later than seven business days before consummation of the transaction. This means if the delivery period began on or before June 17, then June 19 is considered a business day. However, it would also be compliant for creditors to provide the loan estimate earlier than seven business days if they have considered June 19, 2021, a federal holiday.
- If the loan estimate or closing disclosure, as applicable, is not provided to the consumer in person, the consumer is considered to have received the loan estimate or closing disclosure three business days after it is delivered or placed in the mail when determining compliance with the disclosure timing requirements described within the above bullet.
- The consumer must receive any revised loan estimate no later than four business days prior to consummation, and any revised closing disclosure must be received no later than three business days prior to consummation. The timing requirements are based on the version of the specific business day definition in effect on the date the creditor either provides the required disclosures to the consumer in person or, if not provided in person, the date the creditor delivers or places the required disclosures in the mail.
The rule can be located here within the CFPB’s website: Truth in Lending (Regulation Z); Impact of the 2021 Juneteenth Holiday on Certain Closed-End Mortgage Requirements (consumerfinance.gov)