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Compliance Update with Amy K by Amy Kleinschmit, Chief Compliance Officer Juneteenth and “Business Day” While the day has long been celebrated in many states for numerous years, this past weekend, America celebrated its first official national Juneteenth as the new federal holiday was signed into law on Thursday by President Biden. The Juneteenth National Independence Day Act added “Juneteenth National Independence Day, June 19” to Section 6103(a) of title 5, United States Code, as a legal public holiday. As you are no doubt familiar, already on the list are: New Year’s Day, January 1; Birthday of Martin Luther King, Jr., the third Monday in January; Washington’s Birthday, the third Monday in February; Memorial Day, the last Monday in May; Independence Day, July 4; Labor Day, the first Monday in September; Columbus Day, the second Monday in October; Veterans Day, November 11; Thanksgiving Day, the fourth Thursday in November; and Christmas Day, December 25. Regulation Z cross references Section 6103(a) of title 5, United States Code, in its definition of “business day.” As credit unions are more than aware, the meaning of “business day” is very important as the timing of various aspects of the lending process hinges on what is a “business day” per the regulation. Regulation Z provides that business day means a day on which the creditor's offices are open to the public for carrying on substantially all its business functions. However, for purposes of rescission, reverse mortgage disclosures, the TRID Loan Estimate and Closing Disclosures, Escrow account cancellation notice for certain mortgage transactions, disclosures for high cost mortgages; and disclosures for private education loans, the term means all calendar days except Sundays and the legal public holidays specified in 5 U.S.C. 6103(a), such as New Year's Day, the Birthday of Martin Luther King, Jr., Washington's Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day, and Christmas Day. And, as of last Thursday Juneteenth National Independence Day. Accordingly, without further action (such as amending Regulation Z), June 19 is no longer a “business day” for the purposes of the right of rescission, etc., detailed above. The Juneteenth National Independence Day is now the fifth federal legal holiday identified by a specific date as described in commentary below. Regulation Z commentary to 1026.2(a)(6) details: Rule for rescission, disclosures for certain mortgage transactions, and private education loans. A more precise rule for what is a business day (all calendar days except Sundays and the Federal legal holidays specified in 5 U.S.C. 6103(a)) applies when the right of rescission, the receipt of disclosures for certain dwelling- or real estate-secured mortgage transactions under §§ 1026.19(a)(1)(ii), 1026.19(a)(2), 1026.19(e)(1)(iii)(B), 1026.19(e)(1)(iv), 1026.19(e)(2)(i)(A), 1026.19(e)(4)(ii), 1026.19(f)(1)(ii), 1026.19(f)(1)(iii), 1026.20(e)(5), 1026.31(c), or the receipt of disclosures for private education loans under § 1026.46(d)(4) is involved. Four [now five] Federal legal holidays are identified in 5 U.S.C. 6103(a) by a specific date: New Year's Day, January 1; Juneteenth National Independence Day, June 19; Independence Day, July 4; Veterans Day, November 11; and Christmas Day, December 25. When one of these holidays (July 4, for example) falls on a Saturday, Federal offices and other entities might observe the holiday on the preceding Friday (July 3). In cases where the more precise rule applies, the observed holiday (in the example, July 3) is a business day. Unfortunately, as of the writing of this article, the Consumer Financial Protection Bureau has not issued any guidance or provided any flexibility regarding implementation of this new federal holiday and its impact on lending. Concerns are high regarding the litigation risks and rescission rights when the regulatory timing requirements are not followed. Therefore, as emphasized above, remember that June 19 was no longer a “business day” for the purposes of the Regulation Z. As always, DakCU members may contact Amy Kleinschmit at akleinschmit@dakcu.org with any compliance related questions.
Compliance Update with Amy K
by Amy Kleinschmit, Chief Compliance Officer
Juneteenth and “Business Day”
While the day has long been celebrated in many states for numerous years, this past weekend, America celebrated its first official national Juneteenth as the new federal holiday was signed into law on Thursday by President Biden.
The Juneteenth National Independence Day Act added “Juneteenth National Independence Day, June 19” to Section 6103(a) of title 5, United States Code, as a legal public holiday. As you are no doubt familiar, already on the list are: New Year’s Day, January 1; Birthday of Martin Luther King, Jr., the third Monday in January; Washington’s Birthday, the third Monday in February; Memorial Day, the last Monday in May; Independence Day, July 4; Labor Day, the first Monday in September; Columbus Day, the second Monday in October; Veterans Day, November 11; Thanksgiving Day, the fourth Thursday in November; and Christmas Day, December 25.
Regulation Z cross references Section 6103(a) of title 5, United States Code, in its definition of “business day.” As credit unions are more than aware, the meaning of “business day” is very important as the timing of various aspects of the lending process hinges on what is a “business day” per the regulation.
Regulation Z provides that business day means a day on which the creditor's offices are open to the public for carrying on substantially all its business functions.
However, for purposes of rescission, reverse mortgage disclosures, the TRID Loan Estimate and Closing Disclosures, Escrow account cancellation notice for certain mortgage transactions, disclosures for high cost mortgages; and disclosures for private education loans, the term means all calendar days except Sundays and the legal public holidays specified in 5 U.S.C. 6103(a), such as New Year's Day, the Birthday of Martin Luther King, Jr., Washington's Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day, and Christmas Day. And, as of last Thursday Juneteenth National Independence Day.
Accordingly, without further action (such as amending Regulation Z), June 19 is no longer a “business day” for the purposes of the right of rescission, etc., detailed above. The Juneteenth National Independence Day is now the fifth federal legal holiday identified by a specific date as described in commentary below.
Regulation Z commentary to 1026.2(a)(6) details:
Rule for rescission, disclosures for certain mortgage transactions, and private education loans. A more precise rule for what is a business day (all calendar days except Sundays and the Federal legal holidays specified in 5 U.S.C. 6103(a)) applies when the right of rescission, the receipt of disclosures for certain dwelling- or real estate-secured mortgage transactions under §§ 1026.19(a)(1)(ii), 1026.19(a)(2), 1026.19(e)(1)(iii)(B), 1026.19(e)(1)(iv), 1026.19(e)(2)(i)(A), 1026.19(e)(4)(ii), 1026.19(f)(1)(ii), 1026.19(f)(1)(iii), 1026.20(e)(5), 1026.31(c), or the receipt of disclosures for private education loans under § 1026.46(d)(4) is involved. Four [now five] Federal legal holidays are identified in 5 U.S.C. 6103(a) by a specific date: New Year's Day, January 1; Juneteenth National Independence Day, June 19; Independence Day, July 4; Veterans Day, November 11; and Christmas Day, December 25. When one of these holidays (July 4, for example) falls on a Saturday, Federal offices and other entities might observe the holiday on the preceding Friday (July 3). In cases where the more precise rule applies, the observed holiday (in the example, July 3) is a business day.
Unfortunately, as of the writing of this article, the Consumer Financial Protection Bureau has not issued any guidance or provided any flexibility regarding implementation of this new federal holiday and its impact on lending. Concerns are high regarding the litigation risks and rescission rights when the regulatory timing requirements are not followed. Therefore, as emphasized above, remember that June 19 was no longer a “business day” for the purposes of the Regulation Z.
As always, DakCU members may contact Amy Kleinschmit at akleinschmit@dakcu.org with any compliance related questions.