Today, June 16, Congress passed a bill to create a new federal holiday on June 19: Juneteenth National Independence Day.  The bill will now go to President Biden’s desk for signature, and he will reportedly sign the bill at an event this Thursday.  The last-minute creation of a new federal holiday creates compliance concerns under Regulation Z, potentially affecting rescission periods and when mortgage loans can close.

Specifically, the bill would add Juneteenth as a federal holiday under 5 U.S.C. § 6103(a).  The bill does not contain any language about a future effective date. As you may know, Regulation Z has a specific definition of “business day” that excludes federal holidays for certain time periods under Regulation Z.  These periods include the rescission period and the waiting period between receipt of a CD and closing.  Regulation Z defines a business day for these time periods as “all calendar days except Sundays and the legal public holidays specified in 5 U.S.C. 6103(a)….”  Also note that the commentary to Regulation Z discusses what happens if a holiday that is identified by a specific date falls on a Saturday. If this coming Saturday, June 19 becomes a federal holiday, it will affect compliance with these provisions of Regulation Z.

All lenders should ensure that they properly schedule (and adjust, if necessary) mortgage loan closings and rescission periods in light of this new federal holiday that may exist upon President Biden’s signature.

Please contact Richard Horn by email at rich@garrishorn.com if you would like to discuss this issue or have any other questions.

For more information about Juneteenth, see https://nmaahc.si.edu/blog-post/historical-legacy-juneteenth.