The Consumer Financial Protection Bureau has determined that for the purposes of certain mortgage rules, Juneteenth counted as a federal holiday or a business day this year depending on the start date of the compliance period involved.
For compliance periods starting on or before June 17, 2021, when the holiday was signed into law, it was a business day. Thereafter, it’s considered a federal holiday.
The bureau’s interpretation applies to rules around business-day calculations for Regulation Z periods, in which loans can be cancelled and documents have to be received.
That interpretation follows through on the bureau’s promise to provide clarification on the new holiday’s impact on the rescission period for closed-end loans and for certain disclosures. Borrowers get three days to consider whether they want to cancel a mortgage. In rescission periods, federal holidays and Sundays aren’t counted in the business-day count but Saturdays are.
The CFPB noted that it doesn’t penalize creditors for extending the right of rescission more than three days, so its interpretation is aimed at providing leeway regardless of how Juneteenth was categorized this year. The interpretative rule provides similar flexibility around the receipt of disclosures.
“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,” CFPB acting Director Dave Uejio said in a press release issued Thursday. “The mortgage industry can refer to today’s interpretive rule when determining how to treat June 19, 2021.”
