news.cuna.org/articles/Cordray_speaks_on_future_of_QM_rule,_debt_collection,_in_HFSC_testimony

Cordray speaks on future of QM rule, debt collection, in HFSC testimony

March 4, 2015

WASHINGTON (3/5/15)--Consumer Financial Protection Bureau (CFPB) Director Richard Cordray said the bureau could modify its qualified mortgage (QM) rule if housing finance reform does not proceed.

Testifying before the U.S. House Financial Services Committee Tuesday, Cordray provided an update on a number of bureau initiatives.

QMs are generally considered the "safest" of all mortgages, and the CFPB's rule has several rules for defining a QM. Mortgages backed by government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac are covered by the QM rule for the next six years, or until Congress creates a new housing finance system.

The rule, which went into effect Jan. 10, 2014, is scheduled for a five-year review, which will come before the end of the six-year timetable for the GSEs.

By the time the six years runs out, Cordray said "we will have completed the five-year review of these rules, and as needed we will adjust the rules" to prevent a large number of mortgages from losing QM status, and to keep mortgage credit available.

When asked about interaction between the bureau and financial institutions it regulates, Cordray commended the work done by the Credit Union Advisory Council, the Community Bank Advisory council and meetings with stakeholders around the country.

"Those meetings led to things like small creditor provision and potentially expanding that provision, and our rural treatment, which this is key to supporting communities by supporting their community banks and credit unions," he said.

Cordray also said that debt collection is the most complained about activity "at every level of government," and that the CFPB is planning regulate debt collection soon.