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NAFCU Senior Regulatory Affairs Counsel Kaley Schafer wrote to the CFPB Monday in response to the Bureau's 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. The association 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, Schafer reiterated NAFCU’s call for the Bureau to allow for an 18 to 24 month extension of the GSE Patch, at a minimum.

“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.”

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.

In addition, the association has previously met with representatives at the CFPB to discuss the QM patch and highlighted the benefits of the GSE patch in providing credit unions with the ability to sell their loans into the secondary market – generating "vital" liquidity enabling credit unions to make more loans to their members, especially those of low- or moderate-income.

NAFCU will continue its effort to ensure that credit unions are given enough time to prepare for the elimination of the GSE Patch and urge the Bureau to consider a longer extension.