Posted By: RebekahL CRCM

Juneteenth - 06/17/21 09:01 PM

Well the timing of this couldn't be any worse! cry


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
Posted By: TryingtoComply

Re: Juneteenth - 06/17/21 09:23 PM

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.
Posted By: RebekahL CRCM

Re: Juneteenth - 06/17/21 09:37 PM

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!
Posted By: RebekahL CRCM

Re: Juneteenth - 06/17/21 10:02 PM

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?
Posted By: Tesla

Re: Juneteenth - 06/17/21 10:11 PM

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!
Posted By: rlcarey

Re: Juneteenth - 06/17/21 10:18 PM

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.
Posted By: Tesla

Re: Juneteenth - 06/17/21 10:24 PM

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?
Posted By: rlcarey

Re: Juneteenth - 06/17/21 10:27 PM

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.
Posted By: niche girl

Re: Juneteenth - 06/17/21 10:41 PM

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.
Posted By: TryingtoComply

Re: Juneteenth - 06/17/21 11:41 PM

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.
Posted By: Compliance504

Re: Juneteenth - 06/18/21 01:45 AM

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?
Posted By: rlcarey

Re: Juneteenth - 06/18/21 11:14 AM

A decision by an individual agency does not change the law, but it could be a factor in your risk assessment.
Posted By: Tesla

Re: Juneteenth - 06/18/21 01:15 PM

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????
Posted By: niche girl

Re: Juneteenth - 06/18/21 01:19 PM

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?
Posted By: rlcarey

Re: Juneteenth - 06/18/21 01:33 PM

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.
Posted By: Tesla

Re: Juneteenth - 06/18/21 01:33 PM

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?
Posted By: Soccer

Re: Juneteenth - 06/18/21 01:37 PM

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.
Posted By: Dan Persfull

Re: Juneteenth - 06/18/21 01:38 PM

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.
Posted By: Tesla

Re: Juneteenth - 06/18/21 01:49 PM

Thank you all! Hopefully I won't have any more questions (right???) LOL!
Posted By: RebekahL CRCM

Re: Juneteenth - 06/18/21 03:06 PM

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
Posted By: Vive Accommodare

Re: Juneteenth - 06/18/21 03:42 PM

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.?
Posted By: rlcarey

Re: Juneteenth - 06/18/21 03:56 PM

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.
Posted By: Vive Accommodare

Re: Juneteenth - 06/18/21 04:08 PM

perfect! We were thrown off by the "observed" since we're still open and all of our Investors are still open.
Posted By: Mountaineers_Fan

Re: Juneteenth - 06/18/21 05:45 PM

My bank is taking a very similar approach.
Posted By: rainman

Re: Juneteenth - 06/18/21 06:17 PM

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."
Posted By: Comply 101

Re: Juneteenth - 06/18/21 08:50 PM

Our investors stated they would not take a loan from us with the incorrect disbursement date, even going back to the 15th closings. As Randy stated, we will have to issue revised RofR and CDs on some loans.