WASHINGTON—NAFCU is expressing support for the CFPB's proposed rule to create a new category of seasoned qualified mortgages (QM).
In a letter to the agency from Senior Regulatory Affairs Counsel Kaley Schafer, the trade association stated the rule would enhance access to credit for low- to moderate-income borrowers and underserved markets with the requisite ability-to-repay in addition to reducing the negative impacts posed by the Bureau's proposed general QM definition.
In the letter, Schafer noted the proposed rule would increase access to credit and allow credit unions to serve some members previously served by the temporary government-sponsored enterprises (GSEs) QM loan patch. However, because it is not a replacement for the GSE patch, Schafer reiterated the association’s call for the Bureau to extend the GSE patch to at least 18 months after the finalization of this proposed rule to allow for a transition period.
‘Long Advocated’ For Change
“NAFCU has long advocated for a viable GSE Patch alternative that affords the same legal protections and assurances for lenders as the GSE patch,” Schafer wrote. “NAFCU encourages the Bureau to utilize their broad authority under [the Truth in Lending Act] to provide a viable replacement for the GSE patch.”
Previously, the Bureau issued a notice of proposed rulemaking that would allow for a temporary extension of the GSE Patch which would be in effect until the proposed amendments to the general QM loan definition take effect.