WASHINGTON—NAFCU and CUNA have written to the CFPB in response to its notice of proposed rulemaking (NPRM) on the definition of a general qualified mortgage (QM) under the Truth in Lending Act (TILA) and the temporary extension of the government sponsored enterprise (GSE) QM Patch.
NAFCU highlighted the extension of GSE QM Patch's sunset date, which would be in effect until the amendments to the general QM loan definition take effect, and how the extension would impact credit unions in a Regulatory Alert to credit unions sent last month.
In the letter, Senior Regulatory Affairs Counsel Kaley Schafer reiterated NAFCU’s call for the Bureau to allow for an 18 to 24 month extension of the GSE Patch, at a minimum.
The ‘Best Interests’ of All
“With the pandemic’s continued uncertainty and unknown economic effects, it would be in the best interest of the Bureau, credit unions, and consumers to extend the sunset date,” wrote Schafer. “An extended implementation period is necessary to allow for proper implementation of the general QM loan definition. Credit unions need sufficient time to update systems and work with vendors to develop, test, and install new software systems.”
As CUToday.info reported earlier, NAFCU recently joined with nine other organizations to urge CFPB Director Kathy Kraninger to delay rulemakings on the General QM definition and extend of the patch in the wake of the coronavirus pandemic.
CUNA Comments
CUNA, in its comment letter, stated the trade association supports the agency’s extension of the GSE Patch but recommends the CFPB take steps to ensure a gradual transition from the end of the Patch to any new QM definition to give credit unions and the market time to adapt to the changes.
“CUNA supports the extension as a prudent and necessary action to ensure consumers’ continued access to affordable mortgage loans while the Bureau completes its rulemaking on the General QM definition,” wrote Damon Smith, CUNA senior director of advocacy and counsel. “We strongly believe the CFPB should avoid gaps in QM coverage that would disadvantage borrowers and create uncertainty in the nation’s economically vital mortgage lending market.”