The Business Days of Christmas & New Year’s

It’s that special time of year when banks encounter two legal public holidays within a week of each other. There’s always at least a little confusion surrounding holidays, observed holidays, and what gets counted for the purpose of complying with regulatory requirements. To confuse things a little more, not every institution is closed on every holiday, but Christmas & New Year’s Day are popular days for nearly everyone to be closed for business. Adding a little more intrigue to this puzzle, both Christmas in 2022 and New Year’s Day in 2023 fall on a Sunday.

When a holiday falls on a Sunday, for most Federal employees the following Monday will be observed as a holiday for pay and leave purposes. For example, when Christmas Day (December 25) falls on a Sunday this year, Federal offices and other entities will observe the holiday on the following Monday (December 26). In cases where the more “specific” definition of business day applies, such as for the right of rescission, the observed holiday (in this example, Monday, December 26) is counted a business day, even though federal offices will be closed on that day.  The same is true for Monday January 2. Both the Monday after Christmas and the Monday after New Year’s Day will be considered business days where the “specific” definition of business day applies.

The “specific” definition is all calendar days except Sundays and the legal public holidays specified in 5 U.S.C. 6103(a). Of the legal public holidays, five are identified by an exact date: New Year’s Day (January 1), Juneteenth National Independence Day (June 19), Independence Day (July 4); Veterans Day (November 11), and Christmas Day (December 25). Because these five holidays always fall on the same date, they regularly fall on either a Saturday or Sunday.

Although most of the “specific” definition of business day requirements in Regulation Z apply to the timing of the Loan Estimate and Closing Disclosure under the TRID requirements found in 12 CFR § 1026.19, there are other areas affected as well. The right of rescission, escrow cancellation, high-cost mortgages (HCM/HOEPA), reverse mortgages, and private education loans all have aspects subject to the “specific” definition. For example, for rescission purposes, if a loan is closed on Friday December 23, the next day, Saturday December 24 is Day 1 of the 3-day rescission period, Sunday Christmas Day is not counted, Monday December 26 is Day 2, Tuesday December 27 is Day 3, and the funds may be released on Wednesday December 28.

There is also a more “general” definition of business day which means a day on which the bank’s offices are open to the public for carrying on substantially all its business functions. Banks run into this definition regularly regarding whether to count Saturdays as business days. Regarding holidays, whether Monday December 26 or Monday January 2 will be considered a business day for those requirements which fall under the “general” definition of business day, it will depend on whether the bank is open on those days for carrying out substantially all business functions. If the bank is closed on Monday December 26 or Monday January 2, the bank will not consider those business days for purposes of the “general” definition of business day. The regulations which use the “general” definition of business day include Regulation E, Regulation X, and all of the Regulation Z requirements not subject to the “specific” definition.

Not all regulations define the term “business day,” such as Regulation B, and in those instances it’s up to bank policy to determine what a business day is for the purposes of those regulations.

As always, if you have any questions about business days, which requirements apply, and how view a specific date or day of the week, reach out to us on the hotline.