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NAFCU's Carrie Hunt, Ann Kossachev, and Kaley Schafer met Tuesday with representatives at the CFPB to discuss the possible expiration of the temporary government-sponsored enterprises (GSE) qualified mortgage (QM) patch (or GSE patch). NAFCU has engaged with the bureau on the issue throughout the year; the bureau in July issued an advance notice of proposed rulemaking (ANPR) to revise the general QM definition.

NAFCU has highlighted for the bureau 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.

As a result, the association has urged the bureau to make the GSE patch permanent or extend the GSE patch in addition to adopting viable alternatives that allow credit unions "the same protections and benefits, including access to the secondary market, and the ability to provide credit for their members."

The ATR/QM rule prohibits a creditor from making a mortgage loan unless the creditor makes a reasonable and good-faith determination (based on a set of underwriting standards) that the consumer will have a reasonable ability to repay the loan, including any mortgage-related obligations (such as property taxes). The "patch" allows the GSEs – Fannie Mae and Freddie Mac – to purchase certain loans that may not meet the QM criteria, but instead meet other GSE qualifications.

The bureau in January provided NAFCU's Regulatory Committee with an update on the ability-to-repay (ATR)/QM rule following the release of an assessment of the rule. NAFCU-member credit unions shared the high compliance cost of the rule, and also asked for an extension of the GSE patch, which is set to expire when the GSEs are removed from conservatorship or on Jan. 10, 2021 (whichever occurs first).

Hunt is NAFCU's executive vice president of government affairs and general counsel, Kossachev is director of regulatory affairs, and Schafer is regulatory affairs counsel.