Despite urgent requests from the American Bankers Association and others, the Consumer Financial Protection Bureau has thus far indicated to ABA staff that it has no plans to issue guidance on how the newly enacted Juneteenth holiday—being observed today, June 18—affects the timing of disclosures required for mortgage transactions in process. In addition to continuing its outreach to the CFPB and banking agencies to urge them to issue guidance, ABA is calling on the bureau to issue a public statement explaining to consumers why some mortgage transactions may be delayed or re-calculated.
While welcoming the new federal holiday observing Juneteenth, ABA noted that the sudden enactment, coupled with the lack of guidance by regulators, has generated many questions about the timing of disclosures required under Regulation Z in connection with residential mortgage and student loan transactions. ABA and bankers have expressed concern that regulatory timing requirements may require changes to disclosures and waiting periods that are tied to definitions of “holidays” and “business day”—and that re-calculations may be necessary.
Even though bankers face compliance questions that demand immediate answers, until the CFPB issues guidance, there are no certain answers. ABA recommends that banks consult with counsel to determine the best path forward and, as always, document the circumstances and rationale for all decisions, keeping in mind that Truth in Lending Act violations can give rise not only to enforcement actions, but also to private rights of action. ABA has prepared a short document sharing perspectives from law firms on these compliance questions.