On August 5, 2021, the CFPB issued an Interpretive Rule to provide guidance to only address certain Regulation Z timing requirements related to rescission of closed-end mortgages and the TILA-RESPA Integrated Disclosures (TRID) in light of recent legislation that designated Juneteenth as a Federal legal public holiday.

In particular, the Interpretative Rule clarifies whether Saturday, June 19, 2021, counts as a business day or federal holiday for the rescission of closed-end mortgages and TILA-RESPA Integrated Disclosures, depends on when the relevant time period began. If the relevant time period began:

  • On or before June 17, 2021, then June 19 was a (specific) business day.
  • After June 17, 2021, then June 19 was a federal holiday.

The CFPB concluded that its interpretation is consistent with the purposes of the specific business day definition, which are to provide certainty and uniformity to the timing requirements. When the Federal Reserve Board (FRB) established the specific business day definition, the FRB explained that creditors and consumers need certainty as to the length of the rescission period; otherwise, they risk a delay in the loan funding date to account for an extension of the rescission period. Similarly, in issuing the TRID requirements, the CFPB explained that creditors and consumers need certainty as to the length of the waiting and other time periods required under the TRID provisions in order to establish a closing date and reduce the potential for unexpected closing delays. Interpreting these provisions to require use of an amended specific business day definition that takes effect only after the relevant time period begins would undermine that certainty, as it may require a change in the timing of loan funding, closing, and other dates that are dependent on the definition.

The affected closed-end rescission and TRID provisions do not prohibit creditors from providing longer time periods. As such, it would also be compliant for creditors to have considered June 19, 2021, a Federal holiday for purposes of these provisions.

Whereas the Interpretative Rule only provides for the closed-end rescission and the TRID disclosure periods, institutions must still consider the other impact areas as noted in the original article.