If a bank chooses to remain open on a federal holiday, would its FDIC insurance coverage lapse on that day? Would there be any concerns if our bank chooses not to close for the Juneteenth holiday, since it will fall on a weekend day for 2022?

No, FDIC insurance coverage does not lapse when an insured bank chooses to remain open on a federal holiday. We also do not believe there any concerns associated with choosing to remain open on the Juneteenth federal holiday (which the Federal Reserve System recognizes on Monday, June 20 for 2022, since June 19 falls on a Sunday this year). However, you should be aware of how remaining open may affect certain timing requirements under Regulation Z.

We are not aware of any provisions in the Federal Deposit Insurance Act that would authorize or cause a lapse in deposit insurance coverage due to an institution choosing to remain open on a federal holiday. Additionally, we note that the Promissory Note and Bank Holiday Act recognizes June 19 as a state holiday during which “a bank may, but is not required to, remain closed.”

Remaining open on June 20, 2022, may affect certain timing requirements that your bank is subject to under Regulation Z, which generally defines “business day” as “a day on which the creditor’s offices are open to the public for carrying on substantially all of its business functions.” For example, this general definition of “business day” applies to the requirement to deliver a loan estimate “not later than the third business day after the creditor receives the consumer’s application.” Consequently, if you remain open on June 20 this year, it will count as a “business day” for requirements in Regulation Z that use the general definition.

Note that when Juneteenth is observed on June 19, it would not count as a business day for purposes of Regulation Z’s more precise definition of “business day,” regardless of whether you remain open, since Juneteenth is a legal public holiday. However, Regulation Z’s Official Interpretations state that holidays that are observed on days other than when they are officially scheduled count as business days for purposes of the more precise definition. Consequently, June 20, 2022, will count as a business day under the more precise definition of “business day.”

For resources related to our guidance, please see:

Federal Deposit Insurance Act, 12 USC 1818(a)(8)(A) (“If the Board of Directors initiates a termination proceeding under paragraph (2), and the Board of Directors, after consultation with the appropriate Federal banking agency, finds that an insured depository institution (other than a savings association to which subparagraph (B) applies) has no tangible capital under the capital guidelines or regulations of the appropriate Federal banking agency, the Corporation may issue a temporary order suspending deposit insurance on all deposits received by the institution.”)

Promissory Note and Bank Holiday Act, 205 ILCS 630/17(a) (“The following days shall be legal holidays in the State of Illinois upon which day a bank may, but is not required to, remain closed: . . . the nineteenth day of June (Juneteenth National Freedom Day)”)

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.”)

5 USC 6103(a) (“The following are legal public holidays: . . . Juneteenth National Independence Day, June 19.”)

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, 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, Official Interpretation, Paragraph 2(a)(6), Comment 2 (“A more precise rule for what is a business day (all calendar days except Sundays and the Federal legal holidays specified in 5 U.S.C. 6103(a)) applies when the right of rescission, the receipt of disclosures for certain dwelling- or real estate-secured mortgage transactions under §§ 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(c), or the receipt of disclosures for private education loans under § 1026.46(d)(4) is involved. 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.”)