Through an interpretive rule effective August 12, 2021, the CFPB finalized guidance on the Regulation Z timing requirements related to the right of rescission for closed-end mortgages and TILA-RESPA or TRID disclosures. In sum, the guidance is intended to clarify those timing requirements with respect to the definition of “business day” and recent legislation that designated Juneteenth as a Federal public holiday. The following tables explain CFPB’s interpretive rule.
| Juneteenth, Impact on Right of Rescission | Business Day vs. New Federal Holiday |
|---|---|
| General Rule | Consumer may rescind a credit transaction where a security interest will be acquired in the consumer’s principal dwelling until midnight of the third business day following the last of 1) delivery of all disclosures; 2) loan consummation; and 3) delivery of rescission notice to each consumer entitled to rescind. |
| CFPB interpretation for Juneteenth | Rescission period expiration date is based on the definition of business day in effect on the date the rescission period begins. CFPB’s analysis discusses how the interpretation applies to closed-end rescission periods. |
| Rescission Began on or Before June 17 | Saturday June 19 is a business day notwithstanding the addition of Juneteenth as a holiday. |
| Example | Rescission period began Wednesday, June 16. The creditor disclosed Saturday June 19 as expiration date for rescission. In this example, Saturday June 19 is a business day for purposes of determining the end of the rescission period. |
| Recission Period Began June 18 | June 19 is a federal holiday. The rescission period would end at midnight on June 23, effectively June 24. |
| Juneteenth, Impact on TRID Disclosures | Business Day vs. New Federal Holiday |
|---|---|
| Loan Estimate | General rule is creditor must deliver or mail the loan estimate to consumer no later than 7 business days before consummation of the transaction. |
| CFPB Interpretation for Juneteenth | The 7-business day waiting period is determined based on the definition of business day in effect on the date the creditor delivers or mails the loan estimate. |
| Loan Estimate mailed or delivered Monday June 14, 2021. | Creditor in compliance if consummation occurs on or after Tuesday, June 22, 2021. Creditors had the option of considering June 19 a Federal Holiday. |
| Mailbox Rules | In the case of a loan estimate or closing disclosure, a consumer is considered to have received the loan estimate or closing disclosure 3 business days after it is mailed. |
| Loan Estimate or Closing Disclosure mailed Thursday, June 17, 2021. | Consumer is considered to have received the Loan Estimate or Closing Disclosure on Monday June 21, 2021. |
| Receipt of Revised Loan Estimate/Closing Disclosure Prior to Consummation. | A revised loan estimate must be received by 4 business days before consummation. A consumer must receive the Closing Disclosure no later than 3 business days before consummation. |
| Closing Disclosure delivered to consumer in person on Thursday, June 17, 2021. | Creditor complies with timing rule if consummation occurred on or after Monday, June 21, 2021. |
