Removing Barriers Blog

CUNA comments on CFPB's proposal to eliminate GSE Patch
Posted September 17, 2019 by CUNA Advocacy

On Monday, CUNA filed a comment letter to the Consumer Financial Protection Bureau in response to the advanced notice of proposed rulemaking by the agency proposing to eliminate the GSE Patch under the current ability-to-repay requirements.

In the letter, CUNA reiterated the positions it previously advanced in a coalition letter with the American Bankers Association, the Mortgage Bankers Association, consumer advocacy groups and others, urging the agency to eliminate the 43% debt-to-income ratio and Appendix Q requirements in the underlying QM definition, while highlighting specific concerns relevant to credit unions’ ability to fulfill their specified mission of serving individuals of modest means in the absence of any effort by the Bureau to make the requested modifications.

 “Specifically, we urge the Bureau to couple any expiration or limited extension of the GSE patch with a revision to the overall ability-to-repay regulations that would eliminate: 1) the 43% debt-to-income ratio; and 2) the Appendix Q income verification rules as prerequisites for a mortgage loan to satisfy the requirements of the safe harbor created by the QM definition,” the letter reads. “Each of these actions of essential to preserving access to affordable mortgage credit for million of credit union members and ensuring the smooth and orderly transition of the secondary mortgage market.”