October 23, 2021

Volume XI, Number 296

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October 22, 2021

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October 21, 2021

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CFPB Releases TRID Guidance for Juneteenth National Independence Day

Late last week, the Consumer Financial Protection Bureau (CFPB) released an interpretive rule that provided much-welcome guidance related to the effect of the new Juneteenth National Independence Day on disclosure waiting periods under the TILA-RESPA Integrated Disclosure (TRID) rule. According to CFPB Acting Director David Uejio, the Bureau “understand[s] 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 mortgage and certain time-sensitive disclosures. The mortgage industry can refer to today’s interpretive rule when determining how to treat June 19, 2021.”

On June 17, President Biden signed legislation making Juneteenth the 12th federal holiday, and the first new federal holiday since 1983, when Martin Luther King Jr. Day was created. The Juneteenth legislation amended 5 U.S.C. § 6103(a) adding Juneteenth as a “legal public holiday.” The immediate enactment of the legislation caused a good deal of confusion within the mortgage industry regarding how to treat the newly created holiday for purposes of TRID closing disclosures and rescission periods. In particular, after enactment of the Juneteenth legislation, Saturday, June 19, 2021 – which had previously been a “business day” for purposes of TRID waiting periods – was no longer a “business day.”

Although Acting Director Uejio issued a statement on June 18, he did not provide any specific guidance for lenders, instead indicating only that “the CFPB would take into account the limited implementation period before the holiday.” Consequently, it was unclear whether mortgage loan closings scheduled for June 21 – 23, 2021, should proceed in light of the three-business-day closing disclosure period under TRID. Likewise, it was not clear whether home equity loans, home equity lines of credit or mortgage refinancings scheduled to be funded early the next week could proceed in light of the four-business-day rescission period, or whether mortgage lenders were required to issue a revised TILA Notice of Right to Rescind. In both the TRID and rescission contexts, the addition of Juneteenth as a federal holiday also raised questions about the accuracy of the related disclosures that had already been issued.

The CFPB’s new interpretive rule addresses the ambiguity by tying the relevant waiting period to the date that the subject time period began. For instance, if the TRID closing disclosure or rescission period began on or before June 17, 2021, then June 19 should be considered a business day for purposes of TRID because it was not yet a federal holiday at the time the counting period began. However, if the subject time period began after June 17, 2021, then June 19 is considered a federal holiday. Notably, the Bureau recognizes that creditors are allowed to provide longer time periods than required. As such, any mortgage companies that provided closing disclosures or notices of right to rescind on or before June 17 and treated June 19 as a federal holiday ultimately provided compliant notice for purposes of TILA. Even though Acting Director Uejio acknowledged the limited – but really nonexistent – implementation period, the implication of the CFPB’s interpretive rule is that mortgage lenders that were not able to react to the June 17 federal law change by the next day, June 18, do not receive any protections.

Takeaways

The interpretive rule is structured to address the multiple ways that mortgage companies handled a difficult interpretive situation. However, the relative overall importance of the interpretative guidance issued after Juneteenth remains unclear. Of course, mortgage companies will likely be able to rely on the guidance to address TRID issues on a CFPB examination, but this may not be the case if an issue arises in consumer litigation. As such, mortgage companies need to closely monitor for any consumer complaints or buy-back demands related to disclosures over the Juneteenth holiday.

© 2021 Bradley Arant Boult Cummings LLPNational Law Review, Volume XI, Number 222
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About this Author

Jason R. Bushby Attorney Bradley Arant Boult Cummings Birmingham
Partner

Jason Bushby provides regulatory compliance, examination, enforcement, and litigation assistance to a range of financial services clients across the country.

On the compliance side, Jason assists financial services entities as they seek to ensure their operations are compliant with applicable federal and state consumer financial laws. Jason is knowledgeable on the mortgage origination and servicing regulations issued by the Consumer Financial Protection Bureau (CFPB), including the Mortgage Servicing Final Rules in Regulations X and Z and the...

205-521-8086
Brian Epling Corporate Compliance Lawyer Bradley Arant Boult Cummings LLP
Associate

Brian Epling assists financial services clients, including small-dollar lenders, auto finance companies, and mortgage servicers, with navigating regulatory compliance and litigation issues.

On the regulatory compliance side, Brian has assisted financial services clients with policies and procedures to comply with state and federal law and investor requirements. With respect to litigation, practicing in both Tennessee and Kentucky, Brian has successfully argued dispositive motions and appeals involving alleged violations of the Truth in Lending Act, Real Estate Procedures Act, and...

615-252-2340
Christopher Friedman Nashville Lawyer Bradley Arant Boult Cummings Law Firm
Associate

Chris Friedman is a regulatory compliance attorney and litigator who focuses on helping consumer finance companies and small business lenders, as well as banks, fintech companies, and other participants in the financial services industry, address the challenges of operating in a highly regulated sector. Chris focuses on both small business lenders and alternative business finance products and has helped non-bank small business lenders, banks who make small business loans, commercial credit counselors, lead generators, and others in the industry. He helps clients launch new products,...

615-252-3504
Christy Hancock Financial Services Lawyer Bradley
Partner

Christy Hancock’s practice is dedicated to financial services regulatory compliance and litigation. Her work with mortgage servicing and financial institution clients has given her a broad base of knowledge regarding laws affecting the mortgage servicing business, including bankruptcy and foreclosure best practices, payment application, correspondence requirements, allowable fees, loan modifications, escrow requirements, and property preservation. In recent years, the majority of her practice has focused on advising large financial institutions on bankruptcy-related...

704.338.6005
Jonathan Kolodziej Attorney Bradley Arant Boult Cummings Birmingham
Partner

Jonathan Kolodziej represents all types of consumer financial service providers in regulatory compliance, examination and enforcement matters. Through this work, he has assisted bank and non-bank mortgage servicers, mortgage originators, debt collectors, depository institutions, credit card issuers, small dollar lenders, reverse mortgage companies, investment firms, and various industry trade associations.

Jonathan’s regulatory compliance practice centers around helping clients ensure that their operations are in compliance with applicable...

205-521-8235
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