January 02, 2014

NCUA gives QM guidance in alert

Jan. 3, 2014 – NCUA issued a regulatory alert that provides general guidance for credit unions to comply with the CFPB's ability-to-repay/qualified mortgage rule for all loan applications received on or after Jan. 10 – and promising a supervisory letter to examiners before that date.

The regulatory alert reviews the scope of the rule and the rule's eight factors that credit unions must consider in determining a borrower's ability to repay. The agency also explains "qualified mortgage," breaking it down to four types of QM: general, temporary, small creditor and balloon payment. The alert also addresses the rule's record retention requirements as well as the difference between safe harbor QMs and QMs with a rebuttable presumption. Finally, the alert links to other compliance resources for credit unions from both NCUA and CFPB.

NAFCU has encouraged NCUA to remember CFPB Director Richard Cordray's remarks about the bureau's primary interest in "good faith efforts" toward compliance in the early months of the new mortgage rules. In November, NAFCU President and CEO Dan Berger wrote NCUA Board members about the importance of flexibility and working with the CFPB on examinations and enforcement.

More information on the mortgage rules and compliance is available on the NAFCU website, including in the latest issue of NAFCU's Compliance Monitor, which examines the four types of QMs.