Dec. 4, 2012 – The CFPB’s pending rule on what will be a “qualified mortgage” and its proposed delay on remittances are among the topics NAFCU’s board of directors is discussing in a meeting in progress now with CFPB Director Richard Cordray.
The definition of qualified mortgage is addressed in the CFPB’s proposed rule on a consumer’s ability to pay. The rule was drafted under the Dodd-Frank Act and is intended to ensure lenders consider mortgage applicants’ ability to pay before approving the loan application. Several factors are included in the CFPB’s proposed definition of QM, but the extent to which lenders following that standard are protected from civil actions remains unclear. NAFCU is strongly urging that the CFPB rule treat the QM standard as a safe harbor; otherwise, it notes, small credit unions may feel pressed to cease mortgage lending.
Cordray has reached out to NAFCU on the QM issue as well as its international remittance rule. The bureau has since proposed to delay the remittance rule for 90 days.
Currently set to kick in Feb. 7, the bureau’s remittance rule would impose new compliance requirements on any institution facilitating more than 100 remittances a year. That’s enough to persuade many credit unions to cease remittances (something the Federal Home Loan Bank of New York is already planning to do). NAFCU has urged that the threshold be moved to 600 transactions. But ultimately, NAFCU would rather see the CFPB based its rule exemptions for “small” issuers on the institutions’ size and capacity to handle the added burden, not numbers of transactions.
Today’s meeting began about 2 p.m.