Newsroom

March 11, 2021

Reg Alert details proposed QM delay

reg alertIn a new Regulatory Alert sent to members Wednesday, NAFCU detailed how the CFPB's recently proposed rulemaking to delay the mandatory compliance date of its QM rule could impact credit unions. NAFCU previously called for an 18-month delay on the general QM definition and extension of the patch in the wake of the ongoing pandemic and has highlighted the benefits of the temporary government-sponsored enterprise (GSE) patch in providing credit unions with the ability to sell their loans into the secondary market.

As proposed, the NAFCU-supported rule may give lenders more time to utilize the GSE patch. The Regulatory Alert highlights recent changes made by the Treasury and Federal Housing Finance Agency (FHFA) that may limit the scope of the GSE patch extension.  

In the Regulatory Alert, which also poses questions for credit unions to consider, NAFCU Senior Regulatory Affairs Counsel Kaley Schafer highlights:

  • the proposal would change the mandatory compliance date for the new general QM definition from July 1 to October 1, 2022;
  • for applications received on or after March 1 and before October 1, 2022, credit unions will have the option to comply with the new Average Prime Offer Rate (APOR)-based general QM definition or the previous debt-to-income (DTI)-based definition that was in effect prior to March 1;
  • credit unions could utilize the Temporary government-sponsored enterprise (GSE) QM loan category (GSE Patch) until the proposed mandatory compliance date, or the date of the GSEs exiting conservatorship; and
  • the proposal makes no substantive changes to the general QM definition and the bureau may reconsider the rule at a later date.

For more on the rule, including a section-by-section analysis, access the Regulatory Alert here. Comments on the proposal are due to NAFCU April 2; comments are due to the CFPB April 5.

NAFCU also has Final Regulation summaries available on the original QM final rules, outlining key provisions.

NAFCU will continue to work with the CFPB to ensure that credit unions are given enough time to prepare for the elimination of the GSE patch.