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October 22, 2014
NAFCU supports Fed, FDIC action on QRM
NAFCU welcomed Wednesday's action by the Federal Reserve Board and others finalizing an interagency rule that aligns the definition of "qualified residential mortgages" with CFPB's definition of qualified mortgage.
NAFCU Director of Regulatory Affairs Mike Coleman said, in a statement: "NAFCU supports the interagency determination to align the final QRM rule with the definition of qualified mortgage set by CFPB. We believe this will minimize unnecessary hurdles and obstacles for credit unions and other mortgage market participants. However, we remain concerned about elements of both definitions and strongly encourage the agencies to reconsider the effects each would have on mortgage lending."
The final rule largely retains the risk retention framework contained in the proposal issued by the agencies in August 2013 and requires sponsors of asset-backed securities to retain at least 5 percent of the credit risk of underlying, non-QRM loans. It also sets prohibitions regarding transference or hedging of credit risk.
On Tuesday, FDIC became the first regulatory agency to approve the rule. The rule has also been approved by the Federal Housing Finance Agency, Office of the Comptroller of the Currency, Securities and Exchange Commission and Department of Housing and Urban Development.
NAFCU will continue to study the rule for its potential impact on credit unions and their members as participants in the secondary mortgage lending market.
NAFCU Director of Regulatory Affairs Mike Coleman said, in a statement: "NAFCU supports the interagency determination to align the final QRM rule with the definition of qualified mortgage set by CFPB. We believe this will minimize unnecessary hurdles and obstacles for credit unions and other mortgage market participants. However, we remain concerned about elements of both definitions and strongly encourage the agencies to reconsider the effects each would have on mortgage lending."
The final rule largely retains the risk retention framework contained in the proposal issued by the agencies in August 2013 and requires sponsors of asset-backed securities to retain at least 5 percent of the credit risk of underlying, non-QRM loans. It also sets prohibitions regarding transference or hedging of credit risk.
On Tuesday, FDIC became the first regulatory agency to approve the rule. The rule has also been approved by the Federal Housing Finance Agency, Office of the Comptroller of the Currency, Securities and Exchange Commission and Department of Housing and Urban Development.
NAFCU will continue to study the rule for its potential impact on credit unions and their members as participants in the secondary mortgage lending market.
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