CFPB Issues Interpretive Rule On Juneteenth

The Consumer Financial Protection Bureau (CFPB) announced an interpretive rule to assist the mortgage industry in determining whether the community should treat June 19, 2021 (Juneteenth) as a federal holiday or a business day, since servicers must comply with time-sensitive borrower protections. 

“The federal recognition and celebration of Juneteenth was a welcome and important step toward healing the national legacy of slavery,” said CFPB acting director Dave Uejio.

Regulation Z of the CFPB mortgage rules establish time requirements, calculated in business days, when borrowers must receive disclosures or when borrowers have the right to cancel a mortgage. Many members of the mortgage industry were confused on how to treat the newly created June 19 holiday when it was signed into law only two days before the holiday occurred. 

“We understand that the quick enactment of the federal Juneteenth legislation created interpretive questions and compliance challenges for the mortgage industry with respect to rescission of closed-end mortgages and certain time-sensitive mortgage disclosures. The mortgage industry can refer to today’s interpretive rule when determining how to treat June 19, 2021,” Uejio added.

For close-end mortgages and TILA-RESPA Integrated Disclosures, whether June 19 counts as a federal holiday depends when the relevant time period began. If the relevant time period began on or before June 17, 2021, then June 19 was a business day. If the relevant time period began after June 17, 2021, then June 19 was a federal holiday. 

However, creditors are not prohibited from providing longer time periods tha required, so they may consider June 19 a federal holiday. The day of federal observance that takes place on June 18 is considered a business day for time-sensitive consumer protections. 

For more information, read the interpretive rule.