Cordray grilled on QM standard
Sept. 13, 2013 – A hearing by the House Financial Services Committee Thursday to discuss CFPB’s semiannual report to Congress generated some heat from both sides of the political aisle over the bureau’s mortgage rules.
Committee Chairman Jeb Hensarling, R-Texas, and committee member Ed Perlmutter, D-Colo., both included the 43 percent DTI limit in their complaints to CFPB Director Richard Cordray about the provisions for the QM standard.
To illustrate his concern, Hensarling offered an example of someone who has a 44 percent DTI, is putting 20 percent down on their mortgage and has a 720 FICO score. That person couldn’t get a QM loan, he said, even though someone with 43 percent DTI, no money down and a score of 440 could.
Cordray responded by noting QM is just one category of mortgage loan that can be made, and the bureau doesn’t intend for that to be the only type of mortgage available.
Carrie Hunt, NAFCU’s senior vice president of government affairs and general counsel, said Thursday’s hearing discussion underscores the real issues that remain to be settled regarding the bureau’s QM rule, which is still set to take effect Jan. 10.
“NAFCU continues to have concerns about many aspects of the QM rule, and we have repeatedly called for the CFPB to exempt all credit unions from every aspect of the rules, as additional regulations for credit unions are unnecessary and unjustifiably costly,” said Hunt.
Also in Thursday’s hearing:
- Committee Ranking Member Maxine Waters, D-Calif., and others from both political parties asked how the CFPB is working to blunt the impact of its rules on community institutions. Cordray said the bureau’s credit union and community bank advisory councils were created to help with that, adding that credit unions and community banks didn’t cause the financial crisis that spurred Dodd-Frank.
- Responding to a question from Rep. Shelley Moore Capito, R-W.Va., about CFPB’s mandate to review outdated rules, Cordray said the bureau is reviewing old rules as it writes new ones. Rep. Bill Huizenga, R-Mich., also asked that the bureau revisit the points-and-fees portion of its QM rule.
NAFCU continues to urge the bureau to remove affiliate fees from the QM rule’s points-and-fees calculation.
CFPB mortgage rules compliance resources