CUNA supports the Consumer Financial Protection Bureau’s (CFPB) proposed “Seasoned” Qualified Mortgage (QM) to aid in the expansion of the residential mortgage market. The CFPB has proposed to proposed rulemaking to create a new category of QMs, Seasoned QMs, for first-lien, fixed-rate covered transactions that meet certain performance requirements over a 36-month seasoning period.

“The potential of a Seasoned QM category to aid in the expansion of the residential mortgage market in a manner that balances consumer access to affordable credit with meaningful consumer protections is an appropriate use of the CFPB’s rulemaking authority and consistent with its statutory mission,” the letter reads.

CUNA also recommends the CFPB:

• Amend its proposal to include closed-end subordinate-lien loans;
• Permit up to three 30-day delinquencies during the seasoning period, additional flexibility that would permit creditors and borrowers to work through economic changes;
• Permit loans currently being held in portfolio that would meet all other Seasoned QM requirements to be eligible;
• Align the Seasoned QM effective date with the final publication of the final QM rule.