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CFPB on Thursday proposed significant changes to the small creditor exemption requirements in its ability-to-repay/qualified mortgage regulation, suggesting an increase in the total-loan threshold from 500 to 2,000 and factoring mortgage affiliates into the asset threshold of $2 billion.

"NAFCU welcomes CFPB's proposal to provide much-needed regulatory relief to credit unions wishing to continue providing mortgages to their members under the bureau's QM regulation," said Carrie Hunt, NAFCU's senior vice president of government affairs and general counsel. "We strongly urged the bureau to set a more realistic exemption level for small creditors and appreciate CFPB's listening to our concerns and seeking to make its rule more workable. We will closely review this proposed rule and will provide comments to ensure any final rule is the best rule for our members.

"CFPB's mortgage rules implement requirements of the Dodd-Frank Act, which provides a specific exemption for small creditors," Hunt continued. "NAFCU continues to believe all credit unions should be exempt from rules implemented to address abuses in which credit unions did not participate."

CFPB's proposal is out for comment until March 30. In addition to changing asset and loan thresholds, the proposal would expand the definition of "rural" areas, provide grace periods for small creditor and rural or underserved creditor status; create a one-year qualifying period for rural or underserved creditor status; and provide additional implementation time for small creditors.

NAFCU is preparing a Regulatory Alert seeking members' input to the proposed rule.