January 15, 2019

CFPB to update NAFCU reg committee on ATR/QM rule

regulationsNAFCU's Regulatory Committee meets today and will get an update on the Bureau of Consumer Financial Protection's recently released assessment of its ability-to-repay (ATR)/qualified mortgage (QM) rule. Following the release of the report, the bureau specifically reached out to NAFCU requesting credit union feedback.

Seven representatives from the bureau will participate in today's meeting, including from the bureau's offices of mortgage markets, financial institutions and business liaisons, and regulations.

The ATR/QM rule prohibits a creditor from making a mortgage loan unless the creditor makes a reasonable and good-faith determination (based on a set of underwriting standards) that the consumer will have a reasonable ability to repay the loan, including any mortgage-related obligations (such as property taxes). The rule took effect in January 2014.

During today's Regulatory Committee meeting, NAFCU member credit unions will share with the bureau the ATR/QM rule's effect on the industry, including its high compliance cost. NAFCU will ask for further guidance on a provision of S. 2155 that added a new safe harbor category of QMs and how the bureau plans to implement the provision.

The committee will also ask the bureau to extend the government-sponsored enterprise (GSE) patch, which is set to expire either when the GSEs are removed from conservatorship or on Jan. 10, 2021 (whichever occurs first), modify the debt-to-income (DTI) threshold for ATR requirements and allow a cure or correction mechanism for credit unions in certain circumstances, and exclude some items from the points and fees threshold.

NAFCU's next Regulatory Committee meeting is slated for 2 p.m. Eastern Feb. 12.