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May 17, 2021

New NAFCU Network insight post outlines updates on the CFPB’s QM rule

NAFCU networkIn a new post on the NAFCU Compliance, Risk & BSA Network, NAFCU’s Kaley Schafer provides an update on the CFPB’s general qualified mortgage (QM) rule, first published in December. The mandatory compliance date of the rule was recently delayed from July 1, 2021 to Oct. 1, 2022.

In the post, Schafer, NAFCU’s senior regulatory affairs counsel, explains that the delay was due in part to the pandemic, as the CFPB “was concerned about restricting access to credit with adopting the new price-based general QM definition.”

Now, Schafer notes, credit unions have the option to utilize the previous debt-to-income (DTI) general QM definition, the price-based general QM definition based upon an average prime offer rate (APOR), or the government-sponsored enterprises (GSE) patch definition until the mandatory compliance date. Applications received after Oct. 1, 2022 may only use the price-based definition.

NAFCU offered support for the delay as it gives lenders more time to utilize the government-sponsored enterprise (GSE) patch; however, in the post, Schafer flags that recent amendments to the GSE’s Preferred Stock Purchase Agreements (PSPAs) by the Federal Housing Finance Agency (FHFA) and Treasury Department may limit the utility of the GSE patch extension.

The association has raised concerns to the FHFA about this restriction and called on the agency to work with the Treasury on rectifying this issue.

NAFCU has previously expressed opposition to the APOR-based definition and has asked the bureau to instead consider a modified DTI with compensating factors if the rule is reconsidered in the future. The bureau indicated it may reconsider the general QM definition or other aspects of the rule at a future date.

In the post, Schafer also notes that NAFCU has updated the Final Regulatory Alert on the QM rule to reflect these changes. Additional information can be found in past Compliance Blog posts.

NAFCU will continue to work with the CFPB and FHFA to address these concerns. Credit unions can provide feedback and insights on this topic by emailing Schafer at kschafer@nafcu.org.