On June 18, 2021, we issued a Memorandum on the fact that President Joe Biden signed into law the Juneteenth National Independence Day Act. In that update, we indicated that the Consumer Financial Protection Bureau (the “CFPB”) had not yet issued any guidance as to how the new public holiday affects loans that have already closed but are still in the rescission period and promised that we would issue an update should the CFPB issue such guidance. On August 5, 2021, the CFPB finally published its Interpretive Rule, the announcement for which is attached hereto. This interpretative guidance recognizes the difficulty the mortgage industry faced when the law enacting the new holiday only provided two days’ notice, creating uncertainty regarding how it would impact already-commenced periods under the mortgage compliance calendar for TILA and TRID.
In its guidance, the CFPB concluded that (for 2021 only) June 19th, the new Juneteenth holiday, would still be considered a “business day” for rescission purposes and for computing the TRID closing calendar IF the rescission or other relevant period under TRID commenced on or before June 17th (the day President Biden signed the act establishing the holiday). However, June 19th would NOT be considered a business day if the rescission or other relevant period under TRID commenced AFTER June 17, 2021, the date the law creating the new holiday was signed by the President.
The CFPB also noted that the June 19th is a date specific holiday, which means that if the holiday happens to be observed on a date other than June 19th in a particular year, only June 19th would be considered a federal holiday and the observation day would be considered a business day for purposes of rescission and when the the specific definition of “business day” under TRID applies. For 2021, although the federal holiday was observed on June 18, 2021, this day would nevertheless be considered as a “business day” for rescission purposes and for other instances when the specific definition of “business day” is applicable, such as when computing the earliest available closing date under TRID. Finally, the interpretative rule explains that creditors are not prohibited from providing longer time periods than legally necessary. Accordingly, a lender that, out of an abundance of caution chose not to count either June 18th, the observation day of the Juneteenth holiday, or June 19th, as a business day for rescission purposes, or for computing the TRID closing calendar, would not be out of compliance.
Please note that this interpretative guidance is effective upon the date it is published in the Federal Register.
If you have further questions concerning how the new federal public holiday will affect timing requirements or, have questions regarding the contents of this alert, please let us know.
Allan Polunsky at Allan.Polunsky@mortgagelaw.com
Jay Beitel at Jay.Beitel@mortgagelaw.com
Marty Green at Marty.Green@mortgagelaw.com
Lauren Polunsky Dreszer at Lauren.Polunsky@mortgagelaw.com
Peter Idziak at Peter.Idziak@mortgagelaw.com
Claire Barber at Claire.Barber@mortgagelaw.com
Andrew Duane at Andrew.Duane@mortgagelaw.com
Tye McWhorter at Tye.McWhorter@mortgagelaw.com
Cody Beitel at Cody.Beitel@mortgagelaw.com
Doug Foster1 at Doug.Foster@mortgagelaw.com
1 Doug Foster is a non-lawyer and is not admitted to practice law in any state.