CFPB weighing Juneteenth’s impact on mortgage deadlines

There was some confusion at press time Friday about how the new Juneteenth federal holiday applied to mortgage deadlines that count Saturday as a business day.

The Consumer Financial Protection Bureau at deadline had promised to take the sudden nature of the new holiday’s implementation into consideration as it consulted with other agencies on the issue.

“The CFPB recognizes that lenders did not have sufficient time before the holiday to adjust closing timelines and will take that fact into account in any guidance it ultimately issues. Any guidance would be issued after consultation with the other...regulators...to ensure consistency of interpretation for all regulated entities,” a spokesman said in an emailed statement.

In the meantime, attorneys said companies were making disparate calls on whether they thought the new holiday was grounds for them to reconsider and move deadlines or not.

“I’ve seen reactions across the board. Without guidance, it’s hard for lenders to have a clear view of the rules of the road,” said Richard Horn, co-managing partner at law firm Garris Horn, and a former special counsel and senior advisor for the CFPB between January 2011 and February 2014.

The June 19th holiday specifically raised questions for the timing of refinance loan fundings and closings.

CFPB includes Saturday in the three business days consumers have to consider whether they want to follow through with their refinance after they’ve completed certain steps. Legal public holidays are not. (The three-day deadline starts after consumers sign a credit contract called the promissory note, receive a Truth in Lending disclosure, and two copies of a notice advising them of their right to rescind.)

The delivery of the closing disclosure is supposed to take place within three business days after it is placed in the mail. While it appears the post office’s decision to continue delivering mail this weekend despite the holiday may have addressed that concern to some degree, there were reportedly different interpretations as to whether Saturday would be included in the business day count.

Juneteenth “potentially impacts all those business-day counting mechanisms,” said Pete Mills, senior vice president of residential policy and member engagement at the Mortgage Bankers Association. Mills said he was receiving a lot of calls about the issue and advising lenders to contact their legal counsel for guidance on Friday.