news.cuna.org/articles/CUNA_writes_to_support_QM,_NCUA_study_bills

CUNA writes to support QM, NCUA study bills

March 3, 2015

WASHINGTON (3/4/15)--CUNA has sent letters in support of two recently introduced pieces of legislation that help serve the credit union community. CUNA President/CEO Jim Nussle wrote Tuesday to Rep. Andy Barr (R-Ky.) in support of his Portfolio Lending and Mortgage Access Act (H.R. 1210) and to Rep. Mick Mulvaney (R-S.C.) in support of the National Credit Union Administration Budget Transparency Act (H.R. 1176). 

Barr's bill, which has CUNA's strong support, would allow residential mortgages held in portfolio by the original creditor to be deemed "qualified mortgages" (QMs) under the Consumer Financial Protection Bureau's (CFPB) mortgage lending rules.

QMs are a category of loans that are considered more stable, since lenders must have made good faith efforts to determine a borrower's ability to repay, and the absence of certain loan features that can be harmful.

"Treating loans that financial institutions hold on their balance sheets in this manner is appropriate because the lender retains all of the risk involved with these mortgages and is subject to significant safety and soundness supervision from its prudential regulator," Nussle wrote. "This will help credit unions, many of which are primarily portfolio lenders, continue to provide mortgage credit to their members."

Nussle also wrote to support Mulvaney's bill, which was introduced last week. The bill would direct the U.S. Government Accountability Office (GAO) to study the NCUA's budgeting process and identify ways the agency can increase the transparency of the process within 18 months of the bill's enactment.

The study will also determine the availability of line-by-line budget data for the National Credit Union Share Insurance Fund, Central Liquidity Facility and Temporary Corporate Credit Union Stabilization Fund.

"CUNA has consistently advocated for NCUA to be more transparent with their budget process for many years because credit unions fund the agency and the National Credit Union Share Insurance Fund," Nussle wrote. "One way to bring transparency and accountability to the NCUA budget process would be to require the NCUA Board to conduct an annual public hearing on the agency's budget ... conducting such a hearing would represent a very modest burden on the agency and the Board--a handful of hours simply to listen to those whom they regulate--but it would be very meaningful to the credit unions that are responsible for funding the activities of the agency."