CFPB Finds Georgia Waiver of Borrower’s Rights to Violate UDAAP Provisions
In its Summer 2021 Supervisory Highlights, the CFPB addressed the Georgia Waiver of Borrower’s Rights form, which addresses borrower rights in a non-judicial foreclosure. It is a customary practice for the Waiver of Borrower’s Rights to be included in mortgage loan closing packages as a rider to the security instrument. During an examination, CFPB examiners determined the form is deceptive and use of the form violates the CFPA’s prohibition on deceptive acts or practices. We understand that the Georgia State Bar has been notified of the CFPB’s concerns regarding the Waiver of Borrower’s Rights, and we’ll keep you updated as to any changes to Georgia’s title standards as a result. In the meantime, we encourage lenders to share the Supervisory Highlights with investors and discuss removal of the Wavier of Borrower’s Rights from Georgia closing packages.
CFPB Issues Interpretive Rule on Juneteenth Federal Holiday
On August 5, 2021, the CFPB issued an Interpretive Rule to provide guidance on Regulation Z timing requirements relating to rescission and the TILA-RESPA Integrated Disclosures in response to recent legislation that designated “Juneteenth National Independence Day, June 19th (‘Juneteenth’)” a federal legal public holiday.
Under Regulation Z, timing requirements related to a borrower’s right to rescind and the TRID disclosure rules are based on the definition of “business day,” which excludes federal legal public holidays. The Rule explains that the definition of “business day” that applies is the version of the definition in effect when the relevant time period (i.e. recission period or TRID disclosure periods) began. In other words, if the relevant time period began on or before June 17, 2021, June 19, 2021 is a business day. However, nothing prohibited a creditor from providing longer time periods. Therefore, a creditor also acted in compliance if it treated June 19, 2021 as a federal holiday.