The appraisal rules contained in Regulation B were revised on January 18, 2013. The revisions are effective on January 18, 2014. Among other requirements, the revised regulation requires that:
- A copy of each appraisal or other written evaluation be provided to the applicant three business days prior to consummation;
- Not later than the third business day after the creditor receives the application it must provide the applicant with a notice regarding the right to receive a copy of the appraisal.
The term “business day” is used frequently in the revised appraisal requirement, but ironically the term is never defined in the new requirement. A thorough search of Regulation B, the Official Interpretations, and the Supplemental Information issued with the new regulation did not uncover the definition.
Also on January 18, 2013 the Consumer Financial Protection Bureau (CFPB) and the other federal financial institution regulatory agencies issued interagency appraisal rules that, while much broader than the Regulation B rules mentioned above, mirror the two requirements bulleted above. The requirements regarding delivery of the notice and the copy of the appraisal both mention three business days. Among other locations the rules are contained in Section 1026.35 of Regulation Z. Again a thorough review of the regulation, the interpretations and the Supplemental Information do not reveal the definition.
So What Do We Do?
We wait for the CFPB, and the other agencies, to finish writing the regulation.
§1026.2 of Regulation Z contains the definition of the term “business day.” Actually the regulation contains two definitions of the term as follows:
(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), 1026.31, 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.
The CFPB and the other agencies need to publish a minor revision to Regulation Z to clarify which definition of business is to be used. We believe they intend to use the later definition, “all calendar days except…” Revising §1026.2 by adding a reference to §1026.35 completes Regulation Z. Regulation B does not contain a definition of the term “business day.” Revising §1002.2 to include a definition of business day or adding language to §1002.14 to reference the definition in Regulation Z would be sufficient.
There is no panic here. There is plenty of time to implement the rules. Quick action by the regulators will resolve the problem.