Do State (not Federal) Holidays Count as Business Days under Truth in Lending?

When is a holiday a "business day" even if your organization isn't open? (Potentially) when that holiday is merely a State holiday.

By now we know there are different definitions for "business day" for mortgage compliance purposes. This has gotten a lot of attention under the upcoming TRID Rule, where both definitions are used for different parts of the rule.

General Rule

To set the stage before jumping into the day's issue, what are those two definitions of business day again?

1. Generic Business Day - All calendar days except legal public holidays.

2. Specific Business Day - Every day on which the lender is open to the public for carrying on substantially all of its business functions.

Examples

This difference can be important. Here are some examples:

Massachusetts Lender is always closed on Saturdays. Monday is Patriot's Day (Massachusetts) and the lender is also closed. A mortgage application comes in on Thursday afternoon. When do we have to disclose the Loan Estimate? Remember we have three business days ...

Rhode Island Lender is hoping to close a mortgage loan on Tuesday. The borrower receives the Closing Disclosure on Friday. Monday is Victory Day. Is this loan compliant with TRID's 3-day waiting period requirement?

Explained

In the first example, it doesn't matter that Monday is only a State holiday because the 3-day Loan Estimate requirement uses the 2nd definition of business day, the Specific Business Day definition. The lender is not "substantially" open for business, therefore, this is not counted as a "business day" simply because they are not open for business. Therefore the answer is Wednesday.

In the second example, it does matter. When counting down the 3-day waiting period for the Closing Disclosure (as opposed to the Loan Estimate), the Generic Business Day definition applies. This means that we count all calendar days except Sundays and legal public holidays--regardless of whether the lender is actually open or not.

This brings us to the question of the week -- does Victory Day, a Rhode Island holiday only - not a Federal holiday - count as a "legal public holiday"? No. Only Federal holidays are not business days under the Generic Business Day definition. So Victory Day (Rhode Island), Patriot's Day (Massachusetts), and Town Meeting Day and Bennington Battle Day (Vermont) are business days under the Generic Business Day definition. So the answer to the second example is yes - the loan can close on Tuesday, because 3 "business days" (under this definition) have passed.

In Other News:

• We all know TRID regulation does not require the Closing Disclosure to be signed. But what about investor overlays? I think we have the answer, with Wells Fargo announcing that it will require the "final CD to be signed and dated at Closing by all applicable, interested parties."

• A lot of people in N.E. are looking forward to an actual NFL game this Thursday. Did you hear that Pittsburgh practice was delayed this week? The players encountered a mysterious powdery white substance ... special agents were called in and determined it was the goal line. Practice resumed when the agents determined they were unlikely to encounter it again.

• Confused about what charges or 0% tolerance? That's understandable, considering a mistake found in the TRID preamble. On page 79829, the CFPB states, "property insurance premiums, property taxes, homeowner's association dues, condominium fees, and cooperative fees are subject to tolerances whether or not they are placed into escrow, impound, reserve, or similar account." But the TRID Rule itself says that no tolerance at all (as opposed to 0%) applies to these fees. The Rule is right. The preamble is wrong. The CFPB is telling us that they forgot to put a "not" in the Preamble sentence. Whew!

People talk a lot about motivating others. In sports, at work, in charitable endeavors. All well and good but sometimes it's less about you motivating others, and more about everyone trusting each other to motivate themselves ... and supporting their colleagues in any way possible. Not everyone wants a cheerleader, but a lot of people do want more control over their own life, their own work structure. Micromanaging, or overmanaging, sometimes stifles more than anything. Want to help a cause? Set an example for others to follow, delegate, empower, and trust colleagues just a little more than you're comfortable with.

"It is surprising how hard we'll work when the work is done just for ourselves."

- Bill Watterson

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