CUNA joined with a number of trade, consumer and civil rights organizations to request that federal financial and housing regulators delay any conclusion from their re-evaluation of the Qualified Residential Mortgage (QRM) definition.
Specifically, that it be delayed until after the Consumer Financial Protection Bureau (CFPB) finalizes and implements changes it is considering to the Qualified Mortgage (QM) definition. QM and QRM are linked by law, since the definition of QRM can be “no broader than” the definition of QM.
The QRM standard applies to the quality of loans backing mortgage-backed securities (MBS), whereas the QM standard applies to a consumer’s ability to repay a mortgage. Currently, the QM and QRM definitions are identical.
“To ensure the Agencies’ review of QRM is comprehensive and meaningful, we urge the Agencies to delay completing their review at least until the CFPB’s QM rulemaking is complete... Whether the definitions of QRM and QM should continue to be the same or whether changes need to be made, however, are questions that cannot be answered at this time,” the letter reads. “It is only after the CFPB has made its final determination on the definition of QM, and following some period of experience under the new QM configurations, that the Agencies would be in a position to evaluate and seek comment on the market and consumer impacts of QM/QRM equivalency versus divergence of the definitions.”
Each agency was required to start reviewing the regulation by Dec. 24, 2019. The CFPB comment period for its advance notice of proposed rulemaking on QM closed in September 2019, and it is expected that the agency will soon issue a notice of proposed rulemaking.