The Consumer Financial Protection Bureau (CFPB) should recognize that credit unions are not predatory lenders, but good faith partners for members seeking to buy homes, and should modify its ability-to-repay/qualified mortgage (ATR/QM) rule accordingly. CUNA’s comments come in response to a CFPB assessment of its ATR/QM rule.
“While borrowers should have appropriate disclosures when buying a home, we believe the ATR/QM underwriting requirements, together with the sweeping substantive changes made by the Truth in Lending Act and Real Estate Settlement Procedures Act Integrated Disclosure (TRID) rules, increase the regulatory burden on credit unions and create arbitrary barriers to homeownership,” the letter reads.
Specifically, CUNA suggested the following changes to the rule:
Allow all loans held in portfolio by a credit union to be exempt from burdensome ATR underwriting requirements, or alternatively be designated as QM loans receiving a safe harbor;
Remove the 2021 sunset for QM loans that are eligible for sale to the government-sponsored enterprises (GSEs) to prevent market disruptions;
Provide a definition for “residual income” in the Truth in Lending Act Regulation Z ATR requirements;
Make permanent the “cure provision” that provides if a lender discovers after a QM loan has closed that it has exceeded the 3% cap, if the lender pays a refund of the excess amount with interest to the consumer, the loan can still be considered a QM. This provision is scheduled to sunset in 2021.
The letter also cited a June letter from CUNA President/CEO to CFPB Director Richard Cordray outlining a number of positive changes CFPB can make to increase credit unions’ ability to serve members across the country.