Feb. 26, 2013 – NAFCU’s Carrie Hunt on Monday urged the CFPB to expand the range of exemptions offered to credit unions in the bureau’s ability-to-repay rule, as proposed amendments do not go far enough in providing adequate regulatory relief.
The CFPB’s final ability-to-repay rule, set to take effect next Jan. 10, includes a safe harbor for credit union loans that meet the rule's qualified mortgage definition. The CFPB is proposing a number of amendments, including a new qualified mortgage category for small creditors.
Hunt, NAFCU’s general counsel and vice president of regulatory affairs, told the agency in a letter Monday that the association appreciates the CFPB’s efforts to mitigate the regulatory burden under the ability-to-repay rule, but NAFCU remains concerned even in light of the proposed amendments.
The CFPB’s stated reason for the new QM category – that the smaller lenders have strong incentives to conduct ability-to-repay assessments carefully – is true for all federally insured credit unions, not just those defined as “small creditors,” Hunt wrote. In light of this, the CFPB should include all FICUs in this new category, she said.
If the CFPB doesn’t adopt this recommendation, Hunt suggested that it:
- Expand the community-focused lending program exemptions to include low-income credit unions and credit unions operating in underserved areas.
- Revise the “small creditor” definition to reflect a much higher asset threshold than proposed.
- Reconsider the QM debt-to-income requirement – or, at the very least, raise the DTI threshold to 45 percent.
- Remove loan originator compensation from the points-and-fees calculation or, if it remains, limit the calculation to the origination fee whether or not the compensation fee is greater.
A minimum six-month delay in the effective date of the rule is appropriate, Hunt said, given the “rigorous compliance demands” involved.