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#2270336 - 05/11/22 07:10 PM Juneteenth 2022
John Burnett Offline
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I thought I'd get this reminder in early. The Juneteenth federal holiday falls on a Sunday this year, so the Federal Reserve Banks will close on Monday, June 20, the date the federal government will observe the holiday.

Your bank may or may not close on June 20. But, based on conversations with a staff member at the CFPB, June 20 will nonetheless be a business day for the purposes of the Regulation Z precise definition of that term. It will be counted as a business day for purposes of the right to rescind and for certain TRID disclosure timing rules (but not all) and a provision of the disclosure requirements for private education loans.

See our Editor's Note to comment 2(a)(6) of Regulation Z at https://www.bankersonline.com/regulations/12-1026-002#2a6
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#2270339 - 05/11/22 07:24 PM Re: Juneteenth 2022 John Burnett
raitchjay Offline
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OK
Thank you John....helpful information as always.
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#2271237 - 06/06/22 02:37 PM Re: Juneteenth 2022 John Burnett
mnbanker09 Offline
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Our FI is closed on June 20th. We would NOT include this as a business day for timing requirements for ROR, LE, CD, etc.?

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#2271239 - 06/06/22 02:44 PM Re: Juneteenth 2022 John Burnett
John Burnett Offline
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[quote][/quote]
Originally Posted by John Burnett
Your bank may or may not close on June 20. But, based on conversations with a staff member at the CFPB, June 20 will nonetheless be a business day for the purposes of the Regulation Z precise definition of that term. It will be counted as a business day for purposes of the right to rescind and for certain TRID disclosure timing rules (but not all) and a provision of the disclosure requirements for private education loans.

You DO NOT HAVE TO count June 20 in your count of business days for rescission and certain TRID and private education loan rules, but you can, even if you are not open for business.
Last edited by John Burnett; 06/06/22 02:46 PM.
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#2271242 - 06/06/22 03:21 PM Re: Juneteenth 2022 John Burnett
mnbanker09 Offline
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Thank you!

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#2271243 - 06/06/22 04:18 PM Re: Juneteenth 2022 John Burnett
Dan Persfull Offline
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I just sent the following email to our lending staff for how the holiday will affect us.


Last year when this was declared a Federal holiday on such short notice caused a lot of confusion for regulatory notices, especially on the mortgage lending side.

This year June 19th will fall on Sunday. The PSB will be closed in observance of the holiday on Monday June 20, 2022. The following will apply to loans subject to Regulation Z and/or TRID.

Rescission - Monday June 20th will be a business day for the purposes of Rescission.

Loan Estimate - Monday June 20th will not be a business day for the purposes of delivering the Loan Estimate.

Closing Disclosure - Monday June 20th will be a business day for the purposes of delivering the Closing Disclosure.

Thanks,
Dan
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#2271251 - 06/06/22 04:59 PM Re: Juneteenth 2022 John Burnett
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thanks for the reminder, John, and the clear outline, Dan. much appreciated.

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#2271268 - 06/06/22 08:48 PM Re: Juneteenth 2022 John Burnett
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I really wish the Bureau would update the definition to include Juneteenth in the list of "fixed date" holidays. It's been almost a year since the law changed. I suggested last year when I talked with the Bureau representative that the commentary be updated, too, to make it clear that Sunday holidays observed on Monday would work like the Saturday holidays observed on Friday. As it stands, there is nothing official that states that 6/20/2022 will be a business day.
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#2271270 - 06/06/22 09:03 PM Re: Juneteenth 2022 John Burnett
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I think it is clearly stated in the regulation without an update "the term means all calendar days except Sundays and the legal public holidays specified in 5 U.S.C. 6103(a)," and in the commentary "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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#2271279 - 06/07/22 12:43 PM Re: Juneteenth 2022 John Burnett
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My problem with that is that a number of banks have read that, and seeing only the Friday/Saturday example, inferred that it only applies to Friday/Saturday situations. Because Sunday is NEVER a business day under the "precise definition," they see the Sunday/Monday situation as different. It would not be a challenge for the CFPB to clarify the issue by adding a Sunday/Monday scenario -- such as this year's Juneteenth holiday being observed on the 20th rather than the 19th -- when it finally gets around to adding Juneteenth to the list of "specific date" holidays in the regulatory text.

I am not an attorney, but I think they can do all of that without having to go the NPRM, comment, and final rule route.
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#2271296 - 06/07/22 02:50 PM Re: Juneteenth 2022 John Burnett
rainman Offline
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Changes to the official comments require the federal register publication NPRM process. They could issue a FAQ or other type of guidance without going through the notice and comment process.
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#2271297 - 06/07/22 02:50 PM Re: Juneteenth 2022 Dan Persfull
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Based on John's comment, we have the option to have June 20th as a business day if we are closed.

Dan, based on the guidance you shared with your team, what did you base your decision on for including, or not including June 20th as a business day for each of those scenarios?

Sorry, but I feel like I'm making something simple overly complicated! Thanks in advance.

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#2271300 - 06/07/22 03:14 PM Re: Juneteenth 2022 John Burnett
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Originally Posted by mnbanker09
Based on John's comment, we have the option to have June 20th as a business day if we are closed.

You have the option to treat it as a business day for those situations in which you are not required too. Why you would do that and leave yourself only two business days to issue a Loan Estimate I am not sure.

Dan based it on the definition of a business day.

(6) Business day means a day on which the creditor's offices are open to the public for carrying on substantially all of its business functions. However, for purposes of rescission under §§ 1026.15 and 1026.23, and for purposes of §§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, and 1026.46(d)(4), 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.

Only the actual citations above are based on specific Federal holidays. For all other citations, it falls to whether or not you are open for business.
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#2271301 - 06/07/22 03:15 PM Re: Juneteenth 2022 John Burnett
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I believe Dan's response follows the general vs more precise business day that affects each scenario.

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#2271330 - 06/07/22 08:49 PM Re: Juneteenth 2022 John Burnett
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Randy is correct. I based it on the Business day definition. Juneteenth is specified on a specific date.
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#2271363 - 06/08/22 03:23 PM Re: Juneteenth 2022 John Burnett
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I see several have said that for Reg. CC, 6/20 is not a business day. Can anyone clarify what that is based on? I don't see that the definition of "business day" for Reg. CC was changed?

Business day means a calendar day other than a Saturday or a Sunday, January 1, the third Monday in January, the third Monday in February, the last Monday in May, July 4, the first Monday in September, the second Monday in October, November 11, the fourth Thursday in November, or December 25. If January 1, July 4, November 11, or December 25 fall on a Sunday, the next Monday is not a business day.

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#2271366 - 06/08/22 03:37 PM Re: Juneteenth 2022 John Burnett
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Official Interpretation
G. 229.2(f) Banking Day and (g) Business Day
1. The EFA Act defines business day as any day excluding Saturdays, Sundays, and legal holidays. Legal holiday, however, is not defined, and the variety of local holidays, together with the practice of some banks to close midweek, makes the EFA Act's definition difficult to apply. The Board believes that two kinds of business days are relevant. First, when determining the day when funds are deposited or when a bank must perform certain actions (such as returning a check), the focus should be on a day that the bank is actually open for business. Second, when counting days for purposes of determining when funds must be available under the regulation or when notice of nonpayment must be received by the depositary bank, there would be confusion and uncertainty in trying to follow the schedule of a particular bank, and there is less need to identify a day when a particular bank is open. Most banks that act as intermediaries (large correspondents and Federal Reserve Banks) follow the same holiday schedule. Accordingly, the regulation has two definitions: Business day generally follows the standard Federal Reserve Bank holiday schedule (which is followed by most large banks), and banking day is defined to mean that part of a business day on which a bank is open for substantially all of its banking activities
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#2271368 - 06/08/22 04:01 PM Re: Juneteenth 2022 John Burnett
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This is a thorny question. The EFA refers to "legal holidays" but does not further define the term. The Fed created from that a definition of "business day" that excludes Saturdays, Sundays and specific holidays -- listing four "specific date" or "non-floating" holidays (New Years Day, Independence Day, Veterans Day and Christmas Day) and six floating holidays (MLK Jr Day, Washington's Birthday/President's Day, Memorial Day, Labor Day, Columbus Day, and Thanksgiving Day). It goes on to say that if any of the four non-floating holidays falls on a Sunday, the next Monday is not a business day.

The commentary makes it clear that the business day definition in Reg CC is meant to general follow the standard Federal Reserve Bank holiday schedule.

The Fed has not modified the definition of business day to add the Juneteenth holiday as a non-floating holiday. However, the Fed and its branches are not open on Juneteenth and close on June 20 when Juneteenth falls on Sunday.

Given the loose connection between the EFA definition and the definition in the regulation, and the fact that the Fed hasn't amended the definition, one can argue that June 20, 2022, is a business day under the regulation. But given the connection in the commentary between the business day definition and the Fed's calendar, one could argue the other way and say that it will not be a business day (and therefore not a banking day). The Fed has not seen fit to cast any light on the question.

If your bank is not open on June 20, 2022, it won't be a banking day, whether or not it's a business day. Whether it's a business day affects when you have to make funds deposited before June 20 available to the depositor. I imagine that most banks will consider it NOT to be a business day for availability purposes whether or not they are open for business, in the hope that no customers will put up a fuss about it.
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#2271428 - 06/09/22 02:08 PM Re: Juneteenth 2022 Dan Persfull
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So if we are going to be closed on June 20th, we have the option to NOT include that as a business day for Rescission and delivery of the Closing Disclosure, correct?? We would be using the General definition, versus the Specific definition, and the fact we are closed that day would not make it a Business day? Am I understanding this correctly?

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#2271439 - 06/09/22 03:30 PM Re: Juneteenth 2022 John Burnett
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If you are closed then it would not be a business day under the general definition of a business day. It would however still be one under the specific definition IMO. As mentioned, you have the option not to include it as one if you want.

Not treating it as business day for delivery of the CD will delay the closing by one day. You may want to review all pending purchase transactions to make sure that delay does not cause any issues with closing date requirements in the purchase agreement.
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