IBA Compliance Connection

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If a mortgage loan applicant is scheduled to come into the bank to receive and sign their Loan Estimate (LE) on the third business day after we received their application — but is unable to do so because the bank is closed due to inclement weather — can the LE be signed on the following business day, or is the date of the closure for inclement weather considered a “business day” for purposes of the LE deadline? Should we mail the LE as a precaution instead of planning to hand deliver the LE?

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No, we do not believe a day on which your bank closes due to inclement weather would be considered a “business day” for purposes of delivering the LE — provided your bank ceases to carry out substantially all of its business functions on that day. Whether to mail or hand deliver the LE to a mortgage loan applicant is a business decision for your bank, as both delivery methods are acceptable.  

Regulation Z requires creditors to “deliver or place in the mail” the LE no later than the third business day after the creditor receives the consumer’s application. Regulation Z’s Official Interpretations also provide that for purposes of complying with this requirement, “‘business day’ means a day on which the creditor’s offices are open to the public for carrying out substantially all of its business functions.” If a weather-related event causes your bank to close to the public and cease carrying out substantially all of its business functions for a day, we do not believe that day would be considered a “business day” for the purposes of delivering the LE. (Be aware that “business day” is defined differently in 12 CFR 1026.2(a)(6) for several other purposes under Regulation Z, as noted in the resources below.)

If you choose to mail the LE, the consumer is considered to have received it three business days after being placed in the mail, and this applies to electronic delivery as well (provided the loan applicant has consented to receive electronic deliveries consistent with the provisions of the federal E-Sign Act.) Alternatively, a creditor may rely on evidence that a consumer received the LE earlier than three business days after mailing or emailing — for example, if the consumer signs a receipt of overnight delivery or emails the creditor an acknowledgment of receipt of the LE.

Additionally, note that Regulation Z does not require you to obtain a consumer’s signature on an LE.

For resources related to our guidance, please see:

  • Regulation Z, 12 CFR 1026.19(e)(1)(iii)(A) (“The creditor shall deliver or place in the mail the disclosures required under paragraph (e)(1)(i) of this section not later than the third business day after the creditor receives the consumer’s application, as defined in § 1026.2(a)(3).”)
  • Regulation Z, 12 CFR 1026.19(e)(1)(i) (“In a closed-end consumer credit transaction secured by real property or a cooperative unit, other than a reverse mortgage subject to § 1026.33, the creditor shall provide the consumer with good faith estimates of the disclosures in § 1026.37.”)
  • Regulation Z, Official Interpretations, Paragraph 19(e)(1)(iii), Comment 1 (“For purposes of § 1026.19(e)(1)(iii)(A), the term ‘business day’ means a day on which the creditor’s offices are open to the public for carrying out substantially all of its business functions. See § 1026.2(a)(6).”)
  • Regulation Z, 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. 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.”)
  • Regulation Z, 12 CFR 1026.19(e)(1)(iv) (“If any disclosures required under paragraph (e)(1)(i) of this section are not provided to the consumer in person, the consumer is considered to have received the disclosures three business days after they are delivered or placed in the mail.”)
  • Regulation Z, Official Interpretations, Paragraph 19(e)(1)(iv), Comment 1 (“Mail delivery. Section 1026.19(e)(1)(iv) provides that, if any disclosures required under § 1026.19(e)(1)(i) are not provided to the consumer in person, the consumer is considered to have received the disclosures three business days after they are delivered or placed in the mail. The creditor may, alternatively, rely on evidence that the consumer received the disclosures earlier than three business days. For example, if the creditor sends the disclosures via overnight mail on Monday, and the consumer signs for receipt of the overnight delivery on Tuesday, the creditor could demonstrate that the disclosures were received on Tuesday.”)
  • Regulation Z, Official Interpretations, Paragraph 19(e)(1)(iv), Comment 2 (“Electronic delivery. The three-business-day period provided in § 1026.19(e)(1)(iv) applies to methods of electronic delivery, such as email. . . . The creditor may, alternatively, rely on evidence that the consumer received the emailed disclosures earlier. For example, if the creditor emails the disclosures at 1 p.m. on Tuesday, the consumer emails the creditor with an acknowledgement of receipt of the disclosures at 5 p.m. on the same day, the creditor could demonstrate that the disclosures were received on the same day. Creditors using electronic delivery methods, such as email, must also comply with § 1026.37(o)(3)(iii), which provides that the disclosures in § 1026.37 may be provided to the consumer in electronic form, subject to compliance with the consumer consent and other applicable provisions of the E-Sign Act.”)
  • CFPB Guide to the Loan Estimate and Closing Disclosure Forms (May 2018), page 65 (“The consumer is not required to sign the Loan Estimate. The creditor may add a signature statement and have the consumer sign page 3 of the Loan Estimate in order to Confirm Receipt of the Loan Estimate by the consumer. If used by the creditor, the signature statement must contain the exact language from the model form. (§ 1026.37(n)(1)) If the Confirm Receipt table is not used by a creditor, a statement about Loan Acceptance must be included at the end of the Other Consideration table that states, ‘You do not have to accept this loan because you have received this form or signed a loan application.’ (§ 1026.37(n)(2)).”)

(1) At the creditor’s option, under the master heading required by paragraph (k) of this section and under the heading ‘Confirm Receipt,’ a line for the signatures of the consumers in the transaction. If the creditor includes a line for the consumer’s signature, the creditor must disclose the following above the signature line: ‘By signing, you are only confirming that you have received this form. You do not have to accept this loan because you have signed or received this form.’

(2) If the creditor does not include a line for the consumer’s signature, the creditor must disclose the following statement under the heading ‘Other Considerations’ required by paragraph (m) of this section, labeled ‘Loan Acceptance’: ‘You do not have to accept this loan because you have received this form or signed a loan application.’”)