By Anne Marie Poirier-Marquez
Two types of timing requirements pertain to the TILA-RESPA Integrated Disclosures: the Business Day Rule and the More Precise Business Day Rule.
The Business Day Rule
The Business Day Rule is defined in the first part of 12 CFR 1026.2(a)(6):
“Business day means a day on which the creditor’s offices are open to the public for carrying on substantially all of its business functions.”
This rule applies to:
• Loan Estimate – 3 day delivery requirement
• Revised Loan Estimate
• Written List of Providers for which the consumer can shop
• Special Information Booklet
All of the above-listed disclosures must be provided to the consumer within three business days of the creditor’s receipt of the consumer’s application, or within three business days of receiving information sufficient to allow for a revised Loan Estimate, by either personal delivery or placement in the mail. For example, if a creditor’s offices are open to the public on Sundays and every Veterans Day, these days are considered business days, even for purposes of the mailbox rule in relation to these disclosures.
The More Precise Business Day Rule
Supplement I to Part 1026 describes the second part of 12 CFR 1026.2(a)(6) as the More Precise Business Day Rule. The second part of 12 CFR 1026.2(a)(6) states:
“However, for purposes of rescission under §§ 1026.15 and 1026.23, and for purposes of §§ 1026.19(a)(1)(ii), 1026.19(a)(2), 1026.19(e)(1)(iii)(B), 1026.19(e)(1)(iv), 1026.19(e)(2)(i)(A), 1026.19(e)(4)(ii), 1026.19(f)(1)(ii), 1026.19(f)(1)(iii), 1026.20(e)(5), 1026.31, and 1026.46(d)(4), the term means all calendar days except Sundays and the legal public holidays specified in 5 U.S.C. 6103(a), such as New Year’s Day, the Birthday of Martin Luther King, Jr., Washington’s Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day, and Christmas Day.”
Supplement I to Part 1026 further clarifies:
“Four Federal legal holidays are identified in 5 U.S.C. 6103(a) by a specific date: New Year’s Day, January 1; Independence Day, July 4; Veterans Day, November 11; and Christmas Day, December 25. When one of these holidays (July 4, for example) falls on a Saturday, Federal offices and other entities might observe the holiday on the preceding Friday (July 3). In cases where the more precise rule applies, the observed holiday (in the example, July 3) is a business day.”
This rule applies to:
• Loan Estimate – 7 day waiting period
• Closing Disclosure
• Escrow Closing Notice
• Right of Rescission
The Loan Estimate must be personally delivered or placed in the mail at least seven days before consummation, and the Closing Disclosure must be provided at least three business days before consummation. The Escrow Closing Notice must be provided no later than three business days before the consumer’s escrow account is cancelled. Under TRID, the three-day Right of Rescission remains unchanged. In these instances, even if a creditor’s offices are open on Sunday or a federal holiday, these days cannot be considered business days. The only exception would be if a specific date holiday, e.g. Veterans Day, lands on a Saturday, and the creditor observes the holiday the day before. That Friday before Veterans Day would become a business day. For these particular disclosures, the mailbox rule must follow the guidelines of the More Precise Business Day Rule.
Being mindful of these business day disclosure differences can aid in avoiding TRID compliance pitfalls.