CFPB Issues Rule Aiming To Find Out How June Impacted Mortgages

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The Consumer Financial Protection Bureau has determined that for the purposes of some mortgage lending regulations June counts as a public holiday or business day that year, depending on the start date of the relevant compliance period.

For compliance periods beginning on or before June 17, 2021, when the public holiday was established by law, this was a business day. After that, it is considered a federal holiday.

The Bureau interpretation applies to the rules for calculating business days for Regulation Z periods during which loans can be canceled and documents must be received.

This interpretation continues the bureau’s promise to provide clarification of the impact of the new holiday on the cancellation period of closed loans and disclosure of certain information. Borrowers are given three days to consider whether they want to cancel their mortgage. During the cancellation periods for federal holidays and Sundays, business days do not count, but Saturday does.

CFPB noted that it does not punish lenders for renewals termination right more than three days, so its interpretation is aimed at ensuring freedom of action regardless of how it is categorized as “June twentieth” this year. The rule of interpretation provides similar flexibility in obtaining disclosures.

“We understand that the swift enactment of federal legislation in June has raised interpretation and compliance issues for the mortgage industry with regard to cancellations of closed mortgages and certain urgent mortgage disclosures,” CFPB Acting Director Dave Uejio said in a press release. released on Thursday. “The mortgage industry may refer to today’s rule of interpretation when determining how to treat June 19, 2021.”



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