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#2255524 - 06/17/21 09:01 PM Juneteenth
RebekahL CRCM Offline
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RebekahL CRCM
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Big Sky Country
Well the timing of this couldn't be any worse! cry

https://www.consumerfinancemonitor....tm_term=0_6dc018fe4c-06a2546d66-72555717

Nothing like having a Federal Holiday change that affects rescission, in the middle of said rescission period. There are notices out there right now that include 6/19/21. crazy

Shall we start a pool on how the CFPB will say to handle them? laugh
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TRID - TILA/RESPA Integrated Disclosures Rule
#2255529 - 06/17/21 09:23 PM Re: Juneteenth RebekahL CRCM
TryingtoComply Offline
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The West
Not sure about that USC has been amended yet. Has it?

Reg Z references 5 USC 6103: 5 U.S. Code § 6103 - Holidays
U.S. Code

(a)The following are legal public holidays:
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.

Christmas Day, December 25.
Last edited by TryingtoComply; 06/17/21 09:26 PM.
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#2255536 - 06/17/21 09:37 PM Re: Juneteenth RebekahL CRCM
RebekahL CRCM Offline
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Not to my knowledge, but when the underlying law changes, that trumps procedural administration, right? When the President signed the law today, it amended the USC immediately, even if it hasn't been officially published yet. I sure hope the CFPB issues guidance on it tomorrow. I'd like to know if the rescission notices given yesterday and today are still valid. Delaying funding a day could booger up some deals!
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#2255543 - 06/17/21 10:02 PM Re: Juneteenth RebekahL CRCM
RebekahL CRCM Offline
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And the CFPB staff that need to provide guidance won't even be on the job tomorrow. https://bankingjournal.aba.com/2021...p;utm_medium=email&utm_source=Eloqua

Think they'll get anything out tonight?
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#2255544 - 06/17/21 10:11 PM Re: Juneteenth RebekahL CRCM
Tesla Offline
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What are you telling your lenders? We have several closings tomorrow. I read 5 USC 6103(a) and I interpret to mean the Executive Order makes it a covered holiday immediately. (not a lawyer just my interpretation). For loans that will be closing or have closed in the last couple days, do we re-disclose and extend the ROR? For new requests, I think we can add in the holiday for timing for LEs and CloDs. This is going to be a mad scramble. What is everyone doing? I've asked my loan ops people to stick around (it's after 5PM here) until I can figure out our best approach for tomorrow and I am not sure what to tell them!
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#2255546 - 06/17/21 10:18 PM Re: Juneteenth RebekahL CRCM
rlcarey Offline
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This is not an executive order, it is an immediate change to the law that defines Federal holidays. What you do is a business decision, but if the loan has not closed I would issue a revised CD and RofR and delay funding until the proper rescission period runs. I would do that for loans in the pipeline also that have not yet funded.
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#2255547 - 06/17/21 10:24 PM Re: Juneteenth RebekahL CRCM
Tesla Offline
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You're right (on the Exec Order). This is going to be a nightmare. Is there any hope for relief from the CFPB as someone mentioned above?
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#2255548 - 06/17/21 10:27 PM Re: Juneteenth RebekahL CRCM
rlcarey Offline
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Well good luck with that. Tomorrow is a Federal holiday - you think any of them will be working??? If there is going to be anything, it will have to be tonight because by tomorrow - it really is going to be too late.
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#2255549 - 06/17/21 10:41 PM Re: Juneteenth RebekahL CRCM
niche girl Offline
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If I had to guess the CFPB is taking the holiday and will say we should have relied upon the existing law and how we do that is our problem. I can't even fathom how we are going to handle the rescission thing because the rescission disclosure would have to be recreated and updated then provided to the customer that day some way (hand deliver or electronic) because mail wouldn't work. What if the borrower closed their loan and went on vacation and can't be reached to get the re-disclosure of the rescission period and they are thinking the money will be in their account when they get back but since we can't redisclose the rescission period until they get back their money will be delayed a lot? It's a cluster.
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#2255551 - 06/17/21 11:41 PM Re: Juneteenth RebekahL CRCM
TryingtoComply Offline
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I agree with you niche girl. This would be a total mess and for some banks nearly impossible to handle. Besides, borrowers are not likely to be happy with their loan closing being delayed another day. Think about the domino effect of this. Plans for time off work, movers etc.
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#2255552 - 06/18/21 01:45 AM Re: Juneteenth RebekahL CRCM
Compliance504 Offline
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I’ve read that the Post Office will be operating normal hours on both the 18th and 19th…in light of that, do we need to treat this Saturday any differently for disclosure purposes?

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#2255555 - 06/18/21 11:14 AM Re: Juneteenth RebekahL CRCM
rlcarey Offline
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A decision by an individual agency does not change the law, but it could be a factor in your risk assessment.
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#2255564 - 06/18/21 01:15 PM Re: Juneteenth RebekahL CRCM
Tesla Offline
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The memo from PPDocs mentions re-issuing the ROR. How can we do that? Won't it trigger the extended ROR? Or can we justify it with a change the law required us to re-issue????
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#2255565 - 06/18/21 01:19 PM Re: Juneteenth RebekahL CRCM
niche girl Offline
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Yes we will have to issue a new ROR disclosure. But think about the logistics of how that happens. You don't have the borrower at the closing table to hand it to them. You either have to deliver by electronic if they accept ESIGN or hand deliver in some manner or you have to mail it snail mail. Snail mail means they won't be notified of the new rescission period for days and certainly past the time they would have already received their funds. And think about loans that are in rescission right now or scheduled to close that are going to have to be pushed out and have rate locks expiring either before the new rescission is up or before the closing can now take place. Those locks will have to be extended and who pays the monetary cost for that?
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#2255570 - 06/18/21 01:33 PM Re: Juneteenth RebekahL CRCM
rlcarey Offline
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Some of these questions really need to be asked of your investors. I do not disagree with anything that has been said and as far as our memo - our recommendations are based solely on the law and regulation as currently written, What you choose to do for loans that have already closed is really going to be a business decision based on an internal risk assessment. There has been no guidance released by the prudential regulators and without any guidance, we are left with the law and regulation as currently written.
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#2255571 - 06/18/21 01:33 PM Re: Juneteenth RebekahL CRCM
Tesla Offline
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Thanks niche girl- but what is the compliance impact of re-issuing the ROR? I am guessing the rescission period stays open or does the change in law nullify the extended ROR rule?

I agree with your other comments. Fortunately, we don't have 100s of refi customers right now, but enough. We are hoping we can contact them. I am considering relying on the bona fide financial emergency if warranted; particularly for customers in the rescission period now who could have a negative financial impact if we delay funds. As for the additional payoff costs (interest, etc.)we are going to have to eat those we decided. How can we put that on our customers?
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#2255572 - 06/18/21 01:37 PM Re: Juneteenth RebekahL CRCM
Soccer Offline
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We had two loans that closed in the past few days prior to this becoming law with ROR and we are leaving them alone. How is it fair to the borrower that at the 11th hour this Federal holiday pops up and now they have to wait another day for their funds? I'll take my lumps from the examiners if they don't like that we are not going to inconvenience the borrowers. However, everything from today forward will be adjusted to reflect the holiday tomorrow.
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#2255573 - 06/18/21 01:38 PM Re: Juneteenth RebekahL CRCM
Dan Persfull Offline
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As Randy stated how this is handled is going to be a business "risk" decision. FWIW this is what I recommended to our management:

My recommendation is, keeping in mind the effects of not providing a proper rescission can afford the borrower up to 3 years to rescind the transaction.

1. Loans that closed on or before June 17, 2021 allow the rescission period to expire as stated on the rescission form and fund the loan accordingly. My reasoning for this is the law was not in effect at the time the loan closed and the rescission period was based on the law in effect at the time of closing.
2. Any loan that is scheduled to close on or after June 18, 2021 issue a revised CD and Rescission form to reflect the additional one business day delay in the funding. I understand this could cause a logistic nightmare but the law is in effect at the time the loan closes and Saturday June 19, 2021 would not be a business day for the purposes of rescission.
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#2255574 - 06/18/21 01:49 PM Re: Juneteenth RebekahL CRCM
Tesla Offline
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Thank you all! Hopefully I won't have any more questions (right???) LOL!
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#2255582 - 06/18/21 03:06 PM Re: Juneteenth RebekahL CRCM
RebekahL CRCM Offline
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Big Sky Country
We have assessed the letter of the law, the spirit of the law, the lack of agency guidance, and the consequences of actions in every direction.

We have decided for in-house portfolio loans to do nothing, and to continue today with business as usual.

With the post office maintaining their normal delivery, and the impact on consumers in delayed deals all around, we are accepting the risk of being technically out of compliance.

We see the risk of examiner criticism to be low, as well as the likelihood of actual loss due to a rescission action. On the other hand, consumers will be harmed by delays, guaranteed.

We are FDIC supervised, and the only thing they've issued on the matter is a memo addressing operating status. Within that context, they wrote "Given the timing, institutions are encouraged to consider the convenience and needs of their customers when making these decisions.". We are choosing to apply that philosophy to this business day brouhaha too.

May the odds be ever in our favor. crazy cry laugh
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#2255588 - 06/18/21 03:42 PM Re: Juneteenth RebekahL CRCM
Vive Accommodare Offline
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Compliance
Would that mean then since today is "observed" for Juneteenth, we wouldn't be able to count today as well for ROR, closing, delivery timing, etc.?
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#2255596 - 06/18/21 03:56 PM Re: Juneteenth RebekahL CRCM
rlcarey Offline
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No - today is not a non-business day for the specific definition and neither is it under the general definition, if you are open for substantially all of your business.
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#2255598 - 06/18/21 04:08 PM Re: Juneteenth RebekahL CRCM
Vive Accommodare Offline
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Compliance
perfect! We were thrown off by the "observed" since we're still open and all of our Investors are still open.
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#2255608 - 06/18/21 05:45 PM Re: Juneteenth RebekahL CRCM
Mountaineers_Fan Offline
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My bank is taking a very similar approach.

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#2255615 - 06/18/21 06:17 PM Re: Juneteenth RebekahL CRCM
rainman Offline
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Technically under the Reg. Z specific definition, today is a business day and tomorrow (Saturday June 19) is not.

The last part of Official Comment 2 to Reg. Z 1026.2(a)(6) states:

"Four Federal legal holidays are identified in 5 U.S.C. 6103(a) by a specific date . . . 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."
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