This afternoon, CUNA submitted comments to the CFPB regarding their interim final rule titled, “Qualified
Mortgage (QM) Definition Under the Truth in Lending Act (Regulation Z): General
QM Definition.” This rule would amend Regulation Z to, among other things,
replace the 43% debt-to-income (DTI) requirements and Appendix Q DTI calculation
requirements with a more streamlined price-based approach. In short, the
new rule would require the same product-feature and underwriting requirements
and limits on points and fees as the old definition, but replaces the DTI test
with a price threshold requiring which states that the annual percentage rate
(APR) cannot exceed the average prime offer rate (APOR) for a comparable
transaction by more than two percentage points as of the date the interest rate
is set. In addition, in a separate rulemaking, the CFPB proposed
extending the sunset date for the related Temporary GSE QMs until the effective
date of this new General QM definition. We commented on the GSE QM sunset
in August.
“CUNA has submitted numerous comments to the CFPB on the
ATR/QM Rule calling for the elimination of the 43% DTI and Appendix Q
requirements,” the letter states. “We appreciate this amendment as both a
positive response to those requests and an important step in turning the General
QM into a viable option for credit union originations.”
In addition to that general support, the letter also offers
specific recommendations, including allowing full “safe harbor” protections for
all General QM loans, and not just those with an APR that is less than 1.5%
over APOR. The letter further asks the Bureau to reject more complicated
alternatives to the proposed price-based approach and reiterates prior requests
for a longer transition period for the GSE QM to ensure that credit unions and
other lenders have time to adjust to the new General QM definition.
CUNA will continue to work with the CFPB to ensure credit
unions members continue to have access to responsible, affordable mortgage
loans from community-based lenders.