Saturday counts as a business day for most of the counting a mortgage loan originator does under the TILA-RESPA Integrated Disclosure rule (TRID), and it counts because Regulation Z (12 CFR Part 1026) keeps two business day definitions in one paragraph. The precise definition, which counts every calendar day except Sundays and the federal legal public holidays, governs the seven business day waiting period, both receipt rules, and the three business day Closing Disclosure (CD) rule. The general definition, which counts only the days the creditor’s own offices are open, governs the deadline to get the Loan Estimate (LE) out after application. Both sit in 12 CFR s. 1026.2(a)(6), and the paragraph names, one by one, the rules the precise definition reaches.
The two definitions in s. 1026.2(a)(6)
The default is the general one. A business day is “a day on which the creditor’s offices are open to the public for carrying on substantially all of its business functions”. Comment 2(a)(6)-1 supplies the business function test: personnel available to make loan disbursements, to open new accounts and to handle credit transaction inquiries means the creditor is open for substantially all of its business functions. A retailer merely accepting credit cards, or a bank running customer service windows only for deposits, withdrawals and bill paying, does not.
The second sentence of the paragraph then swaps in a calendar rule for a closed list of provisions. For those, a business day means “all calendar days except Sundays and the legal public holidays specified in 5 U.S.C. 6103(a)”. Sunday comes out. Saturday stays in whether or not the office opens. Ten federal holidays are named in the regulation’s own example list, from New Year’s Day through Christmas Day, and the list the regulation points at is the one in 5 USC s. 6103(a).
Which rule uses which clock
The list below is the one the regulation prints. Every provision marked precise below is one the paragraph names; the two marked general are there because it does not.
| Provision | What it times | Definition | Saturday counts |
|---|---|---|---|
| s. 1026.19(e)(1)(iii)(A) | LE delivered or mailed within 3 business days of application | general | only if the creditor is open |
| s. 1026.19(e)(1)(iii)(B) | LE delivered or mailed by the 7th business day before consummation | precise | yes |
| s. 1026.19(e)(1)(iv) | LE deemed received 3 business days after mailing | precise | yes |
| s. 1026.19(e)(2)(i)(A) | no fee before the consumer receives the LE and says go ahead | precise | yes |
| s. 1026.19(e)(4)(i) | revised LE within 3 business days of the reason for revision | general | only if the creditor is open |
| s. 1026.19(e)(4)(ii) | revised LE received by the 4th business day before consummation | precise | yes |
| s. 1026.19(f)(1)(ii) | CD received by the 3rd business day before consummation | precise | yes |
| s. 1026.19(f)(1)(iii) | CD deemed received 3 business days after mailing | precise | yes |
| s. 1026.19(a)(1)(ii) and (a)(2) | reverse mortgage early disclosures, fee bar and waiting periods | precise | yes |
| s. 1026.20(e)(5) | escrow cancellation notice, 3 business days before closure | precise | yes |
| s. 1026.31 | high-cost and reverse mortgage disclosures, 3 business days before consummation | precise | yes |
| s. 1026.46(d)(4) | private education loan disclosures deemed received | precise | yes |
Two rules that look like they belong on the precise side are absent from the paragraph and therefore run on the general definition. The revised Loan Estimate after a rate lock, due no later than three business days after the lock under s. 1026.19(e)(3)(iv)(D), counts the creditor’s open days. So does the ten business day life of a Loan Estimate under s. 1026.19(e)(3)(iv)(E), which the Consumer Financial Protection Bureau (CFPB) confirms in its compliance guide at p. 70 by telling creditors to use the definition that applies to providing the Loan Estimate. Rescission under s. 1026.23 and under s. 1026.15 sits on the precise side, named at the head of the sentence.
One paragraph of the regulation splits down the middle. Section 1026.19(e)(4) has a three business day deadline to issue the revised Loan Estimate and a four business day cushion before consummation, and only the second one is in the list. The CFPB says so in as many words at p. 73 of its TRID small entity compliance guide.
The CFPB’s calendar for October 2015
The CFPB published a worked timeline, version 2.0 of July 2015, that counts both clocks across one transaction. Its assumptions are on p. 3: the creditor is not open on Saturdays, and the application reaches the creditor on Monday, October 5, 2015. Page 9 of that timeline example then shows what each definition produces.
- The Loan Estimate goes out on Thursday, October 8. Three business days from Monday on the general definition, with the creditor shut on Saturday.
- The consumer is treated as receiving it on Tuesday, October 13. Three business days from mailing on the precise definition: Friday the 9th, Saturday the 10th, then Sunday drops out, then Columbus Day on Monday the 12th drops out, then Tuesday the 13th.
- The earliest consummation is Saturday, October 17, seven business days after delivery on the precise definition. The waiting period ends on a day the creditor’s offices are closed, and the rule still closes it there.
The December page, p. 11, runs the same arithmetic on the Closing Disclosure for a December 30 closing. The consumer has to receive the CD by Saturday, December 26: December 29 is the first business day before consummation, December 28 the second, Sunday December 27 drops out, and Saturday December 26 is the third. Mailing it on Tuesday, December 22 lands the deemed receipt on the same day, because Christmas Day comes out of the count.
The observed holiday that is still a business day
Comment 2(a)(6)-2 settles what happens to an observed holiday. Four of the federal holidays are fixed to a date rather than to a weekday: New Year’s Day on January 1, Independence Day on July 4, Veterans Day on November 11 and Christmas Day on December 25. When one of those falls on a Saturday, federal offices commonly observe it on the preceding Friday. Under the precise definition the observed day, the Friday, is still a business day, and the Saturday is the holiday that comes out of the count.
Why the general definition is a fact about the creditor
The general definition turns on one creditor’s own opening hours. A lender whose branches open on Saturday for substantially all of its business functions has a six day week for the three business day Loan Estimate deadline, and a lender that closes Saturdays has a five day week. Two lenders taking the same application on the same Monday can owe the Loan Estimate on different days, and both are in time. The precise definition never varies that way: it runs off the calendar alone.
Both definitions appear in s. 1026.2(a)(6), and the closed list in its second sentence settles which rules take the calendar clock.
Sources
- Regulation Z, 12 CFR Part 1026, and its official interpretations in Supplement I.
- 5 USC s. 6103(a), United States Code release point 119-102.
- CFPB, TILA-RESPA Integrated Disclosure timeline example, version 2.0, July 2015, pp. 3, 9 and 11.
- CFPB, TILA-RESPA Integrated Disclosure rule small entity compliance guide, version 5.2, October 2017, pp. 49, 70 and 73.