CFPB may ‘revisit’ seasoned QM final rule, will ‘shortly’ propose delayed compliance date for general QM rule

Whether to revoke or revise the “seasoned” qualified mortgage (QM) final rule issued in December is a question being mulled at the Consumer Financial Protection Bureau (CFPB), according to a statement issued Tuesday.

The bureau, in that statement (circulated along with a notice of small-entity compliance guide updates), also said it was looking at whether to delay the July 1 mandatory compliance date for the December final rule on the general QM loan definition.

Both rules, which created a “seasoned” QM loan definition and revised the existing QM loan definition – now called the general QM definition – are set to take effect March 1, with mandatory compliance generally set for July 1. The new seasoned QM and general QM definitions in those rules also replaced the debt-to-income ratio ceiling as a QM factor, instead using performance requirements and a pricing component, respectively.

Regarding the seasoned QM rule, the bureau said Tuesday that if it decides to revisit the rule, “it expects that it will consider in that rulemaking whether any potential final rule revoking or amending the Seasoned QM Final Rule should affect covered transactions for which an application was received during the period from March 1, 2021, until the effective date of such a final rule.” It said only that it may “initiate a rulemaking to revisit” the seasoned QM rule, but it did not say in that statement whether this would be a proposed rulemaking, final rule, or interim final rule.

As for the general QM rule, the CFPB said it “expects to shortly issue” a proposed rule that would delay the July 1 mandatory compliance date. It said any such delay would also delay one of the two possible expiration dates for the temporary GSE (government-sponsored enterprise) QM loan definition. The bureau issued a final rule in October providing that the temporary GSE QM loan definition will expire on (1) the mandatory compliance date of the general QM final rule or (2) with respect to each GSE when that GSE – Fannie Mae or Freddie Mac – ceases to operate under the conservatorship of the Federal Housing Finance Agency (FHFA), whichever happens earlier.

If the proposed delay in the general QM final rule is finalized, it said, creditors would be able to use either the current general QM loan definition or the revised general QM loan definition for applications received from March 1, 2021, until the delayed mandatory compliance date. “Furthermore, the Bureau anticipates that the Temporary GSE QM loan definition will remain in effect until the new mandatory compliance date, in accordance with the October 20, 2020 final rule described above, except that the Temporary GSE QM loan definition would expire with respect to a GSE if that GSE ceases to operate under conservatorship prior to the new mandatory compliance date,” it said.

Statement on Mandatory Compliance Date of General QM Final Rule and Possible Reconsideration of General QM Final Rule and Seasoned QM Final Rule

RR: Small-entity compliance guide on ATR/QM rule updated by bureau (Feb. 24, 2021)

RR: Bureau makes final two new QM rules: one on ‘general QMs,’ the other on ‘seasoned QMs’ (Dec. 10, 2020)

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