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CFPB Provides Guidance on Juneteenth...49 Days Later

Michael Christians • August 8, 2021

On August 5^th, the Consumer Financial Protection Bureau (CFPB) published an interpretive rule providing lenders guidance related to the new Juneteenth federal holiday. Its hard to assign value to a rulemaking that comes 49 days too late; however, I suppose it will prove insightful the next time Congress gets around to adding another federal holiday. Note: the last federal holiday added prior to Juneteenth was in 1983 when Congress officially recognized Dr. Martin Luther King Jr.’s birthday as a legal public holiday.

Four different timing provisions under Regulation Z exclude legal public holidays from the definition of the term business day. These include:

· Providing a consumer three days to cancel a transaction subject to the right of rescission,

· Ensuring a consumer receives his/her Loan Estimate at least seven business days before consummation,

· Ensuring a consumer receives any revised Loan Estimate at least four business days before consummation, and

· Ensuring a consumer receives his/her Closing Disclosure at least three business days before consummation.

The CFPB’s interpretive rule states that the applicable list of legal public holidays is the one in effect at the time the waiting period begins to run. Let’s consider a couple of examples…

Right of Rescission

The consumer’s rescission period began Wednesday, June 16^th, before Juneteenth was officially added as a legal public holiday. The creditor disclosed Saturday, June 19^th as the end of the rescission period. This is permissible because, at the time the rescission period began to run, June 19^th was not yet a legal public holiday. Had the consumer’s rescission period began to run anytime after June 17^th (the day Juneteenth officially became a legal public holiday), the creditor would have been required to exclude June 19^th as a business day.

Delivery of the Closing Disclosure Prior to Consummation

The creditor provided a Closing Disclosure to the consumer in-person on Thursday, June 17^th. Closing could occur at any time on or after June 21^st because, at the time the three-day waiting period began to run, June 19^th was not yet a legal public holiday. Had the waiting period began to run anytime after June 17^th, the creditor would have been required to exclude June 19^th as a business day.

Nothing in the interpretive rule prohibits a creditor from excluding a newly identified legal public holiday from the definition of business day prior to its “effective” date. This is because nothing in Regulation Z prohibits a creditor from providing a consumer with a longer rescission period or longer waiting period prior to consummation.

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