Earlier this week, the Consumer Finance Protection Bureau
(CFPB or the Bureau) issued a final
rule extending the sunset date for the GSE Qualified Mortgage (QM)
Patch. The GSE QM Patch temporarily defines certain mortgages eligible
for purchase by Fannie Mae and Freddie Mac as QMs that receive liability
protections against claims that the loans were originated in violation of the
Truth in Lending Act. This final rule amends Regulation Z to replace the
previous January 10, 2021 sunset date of the GSE QM Patch with an expiration on
the mandatory compliance date of final amendments to the General QM loan
definition, which is being determined through a separate rulemaking.
In this final rule, the Bureau links the new expiration of
temporary GSE QM loans to the “mandatory compliance” date established in the
anticipated revisions to the General QM definition instead of the Genera QM’s
proposed “effective date.” This is particularly important because that
effective date was previously described as occurring as soon as April
2021. As a result of this change, the Bureau can adopt a later General QM
compliance period that will allow for a more orderly transition for credit
unions and other lenders to update their business processes and information
technology systems.
CUNA welcomes this development as responsive to our comments
on the proposed rule. As we stated in our letter, the extension is a
“prudent and necessary action to ensure consumers’ continued access to
affordable mortgage loans” but needs an “an extended and gradual transition
period,” prior to expiration of the patch. We reiterated these points in
a related
letter on the amendments to the General QM definition. We are pleased
to see that this final rule creates space for such a transition and will
continue to advocate for a reasonable mandatory compliance date so credit
unions have sufficient time to adapt to the new General QM.
Please contact Damon
Smith with any questions.