Alert provides credit unions with details behind CFPB QM compliance date delay

The delay to Oct. 1, 2022, of the mandatory compliance date of the general qualified mortgage (QM) final rule is the subject of a regulatory alert issued by the federal credit union regulator Monday.

NCUA Board Chairman Todd Harper signed the alert (21-RA-06) which was sent to all federally insured credit unions and details the action taken by the Consumer Financial Protection Bureau (CFPB) in April. Under the consumer bureau’s final rule (issued April 27), compliance with the QM rule moved to Oct. 1 of next year from July 1 of this year. CFPB last month said the delay was made to “help ensure access to responsible, affordable mortgage credit, and preserve flexibility for consumers affected by the COVID-19 pandemic and its economic effects.”

The final rule making the change was titled “April 2021 Amendments to the ATR/QM Rule” (ATR stands for “ability to repay”).

In its alert, the NCUA notes the two categories that the compliance date delay affects: general QMs and temporary GSE QMs (referring to QMs issued by government-sponsored enterprises Fannie Mae and Freddie Mac).

The alert notes that under the general GM category, a lender can use either the original underwriting process (with the 43 percent debt-to-income, or DTI, limit) or the new underwriting process (with price-based thresholds) for applications received from March 1, 2021, to Sept. 30, 2022. Lenders must use the revised general QM loan definition for applications received on or after Oct. 1, 2022.

Under the GSE category, the alert states, the temporary GSE QM loan definition expires upon the earlier of Oct. 1, 2022, or the date the applicable GSE exits federal conservatorship (rather than on the original mandatory compliance date of July 1, 2021, or the date the applicable GSE exits federal conservatorship).

CFPB Delays Mandatory Compliance Date of General Qualified Mortgage (QM) Final Rule Under Truth in Lending Act (21-RA-06)