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Removing Barriers Blog

More Barriers Removed for Small Creditors Under Revised QM Rule
Posted September 21, 2015 by CUNA Advocacy

CUNA was successful in convincing the Consumer Financial Protection Bureau (CFPB) to increase the threshold under its revised Qualified Mortgage (QM) regulations.  On Monday, September 21, the CFPB expanded the definition of “small creditor” to include those institutions that originate and sell fewer than 2,000 mortgages per year, and have less than $2 billion in assets.  These same creditors can provide an unlimited amount of loans held in portfolio and still receive the small creditor status under the revised QM regulation.

The CFPB’s rule, which will take effect Jan. 1, 2016, also increases the number of financial institutions able to offer certain mortgages in rural and underserved areas.

In its original comment letter on the proposal, CUNA recommended the asset threshold be raised to $10 billion. Although the limit was increased to $2 billion, this final rule will allow more small-creditor loans to be considered Qualified Mortgages, receiving safe harbor legal status.

CUNA is still assessing the complete impact of the final rule, but believes this is a step in the right direction for regulatory relief for credit unions.

“CUNA applauds the CFPB for providing much needed regulatory relief for smaller credit unions,” said Elizabeth Eurgubian, CUNA’s deputy chief advocacy officer. “We remain concerned with the inclusion of affiliate assets in the $2 billion threshold. We hope the CFPB will continue to refine rulemaking in this area.”