Federal Holidays that fall on a weekend (like Christmas and New Year’s Day do this year) always bring up questions with how financial institutions count days for various Regulation Z requirements.

You may know that Regulation Z famously has TWO definitions for business day.  The “Business Day” definition you use depends on what “counting requirement” you are looking at. The first “Business Day” definition is straightforward:

“a day on which the creditor’s offices are open to the public for carrying on substantially all of its business functions”

This definition is further clarified in the commentary:

“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.”

The second “Business Day” definition gets a bit trickier:

“the term means all calendar days except Sundays and the legal public holidays specified in 5 U.S.C. 6103(a)”

These “legal public holidays” currently include (New Year’s Day, Birthday of Martin Luther King, Jr., Washington’s Birthday, Memorial Day, Juneteenth National Independence Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day, and Christmas Day).

Of these legal public holidays, five are held on specific calendar days (New Year’s Day, Juneteenth, Independence Day, Veteran’s Day and Christmas) and may fall on a Saturday or a Sunday.  When this happens, credit unions may “observe” the holiday on the adjacent Friday or a Monday by closing their offices. If this happens, the commentary to this section of Regulation Z clarifies that the “observed holiday” day is still a business day under Definition #2.

For example, Christmas day falls on Saturday, December 25th this year. If your credit union is closed on Friday December 24th in observance of Christmas, you would not count Friday as a business day if the requirement with which you are complying uses Definition #1 (because the credit union’s offices are closed).  You would count Friday, December 24th as a business day if the requirement with which you are complying uses Definition #2 (regardless of if your offices are open or closed on the 24th).  You would not count Saturday the 25th as a business day in either instance (both the credit union is closed and it is the official date of the holiday).

So big question, which Reg Z definition of “business day” applies to which requirements?  This chart should help: