Newsroom
CFPB considers allowing ATR/QM patch to expire
The CFPB plans to allow the Ability to Repay/Qualified Mortgage (ATR/QM) patch to expire in 2021, or after a short extension if necessary to facilitate a transition, according to an Advance Notice of Proposed Rulemaking (ANPR). The ATR/QM patch allows loans purchased or guaranteed by the government-sponsored enterprises to exceed the bureau's 43 percent debt-to-income ratio.
"NAFCU supports credit unions being able to provide provident credit to as many American consumers as possible," said NAFCU Executive Vice President of Government Affairs and General Counsel Carrie Hunt. "NAFCU has long supported a more expansive definition of what constitutes a qualified mortgage and will be providing our feedback to the CFPB.
"Under the current QM definition, the QM Patch has been a key factor in credit unions' ability to lend to members of their communities, especially those of low- and moderate-income, to achieve homeownership. We will support a solution that allows credit unions to continue to lend to those communities," she added.
The bureau gave NAFCU's Regulatory Committee an update on its assessment of the ATR/QM rule in January, during which credit unions specifically asked for an extension of the patch.
The bureau also seeks comments through the ANPR on whether the definition of qualified mortgage should continue to measure a consumer's personal finances – such as debt-to-income ratio – and if the definition should allow for an alternative method for assessing financial capacity.
"We want to hear all perspectives on how to move beyond the GSE Patch, the impact on credit, the role of the private mortgage market, and possible modifications to the definition of qualified mortgages and the rules governing the documentation of debt and income," said CFPB Director Kathy Kraninger in a statement. "The Bureau is committed to ensuring a smooth and orderly mortgage market throughout its consideration of these issues and any resulting transition away from the GSE Patch."
NAFCU will issue a Regulatory Alert outlining the ANPR and seeking member credit unions' feedback.