[Todd H.]

Recently, we acquired a financial institution that did not open on Saturdays. All other locations are open on Saturdays. As of right now, we have no intention on opening these two locations on Saturday. Two questions:

1. Our loan processing department processes our Loan Estimates, Closing Disclosures, etc. If the loan processing department is closed on Saturday and no Loan Estimates are issued, then under the business day rule at 1026.2(a)(6)-Comment 1, would this exclude us from the business function test? While the loan processing department is closed, we would open new accounts, handle credit transaction inquiries, take loan applications, collect deposits and withdrawals, etc. If we are not excluded, then:
2. Because the two locations I mentioned above are closed (out of 26 other locations), I cannot exclude these two from the rule because although they may be closed, we have other locations that are open and they meet the definition as described above.

Thanks in advance.

Topic

[Todd H.]

For clarification to my above post, we currently go by the standard that we are open on Saturday, so if the three business day clock is going to hit on a Saturday, the loan processing department is to deliver the Loan Estimate the day before, on Friday.

[rcooper]

Hi Todd. Thanks for the question.

If you meet the business function test (to make loan disbursements, to open new “loan” accounts, and to handle credit transaction inquiries) than I think you would consider Saturday a business day. I’m not sure if you’re are or are not meeting that criteria; if you are then Saturday is a business day for you. I have always considered business day to be determined at the bank level rather than branch level and I don’t know of any information that directly disputes that so my opinion is, if you determine you are carrying on substantially all of your business functions on Saturday it would also be a business day for the two branches as well.

[Todd H.]

Thanks for the follow up Robin. The part I struggle with as it relates to the business function test is this. The majority of our banking centers are open on Saturdays. We have lenders and an underwriter or two working, taking applications, underwriting the loan, closing the loan, and disbursing proceeds as needed but this only applies for consumer loans. For residential loans, while we may take an application on Saturday, uur disclosure and processing function for residential lending is not available on Saturday, or in the scenario above, we would have to issue on Friday. In short, we have available consumer lending staff to meet the demand but as it relates to our residential business function, we do not. Hence, my issue regarding this gray area.

[rcooper]

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.

Comment 1026.2(a)(6) Business Day
1. Business function test. Activities that indicate that the creditor is open for substantially all of its business functions include the availability of personnel to make loan disbursements, to open new accounts, and to handle credit transaction inquiries. Activities that indicate that the creditor is not open for substantially all of its business functions include a retailer’s merely accepting credit cards for purchases or a bank’s having its customer-service windows open only for limited purposes such as deposits and withdrawals, bill paying, and related services.

It sounds like you don’t have staff on hand to do these tasks (e.g. make loan disbursements, open accounts, etc.) for real estate transactions, only consumer (non-real estate) and, as a result, to me it sounds as though you are not open for substantially all of your business functions.

You could always contact your examiners since they’ll be reviewing your processes and get their opinion (since that is what it ultimately comes down to on something like this). Of course, you know they won’t give you anything in writing, but you would be able to document your conversation and their opinion.

[Author]

Replies