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QM Leeway?

Hopefully everyone who offers mortgage loan products has taken a look at the new CFPB mortgage rules. With the January right around the corner, I also hope you have begun to prepare for the implementation of those rules within your own credit union.

Within the past few weeks, CUNA has fought to push back the implementation period of those new CFPB mortgage rules. This delay was also backed by a request from 100 U.S. House members as well.

Last week, Richard Cordray, the head of the CFPB, had stated that the rules would not get pushed back or delayed and that the January dates for implementation would not be changed. Some credit unions may have hoped for a different response and some additional time to ensure compliance with the new rule.

While the dates for implementation won’t change, Cordray, in a semiannual report before the Senate Banking Committee yesterday, stated that examiners will give institutions some leeway in the early months after the QM regulation is implemented in January. Essentially, examiners will be looking for financial institutions to have taken implementation seriously and also have compliance monitoring in place.

While this is not a reprieve from implementing these rules by January, it does show that the CFPB and its examiners will work with institutions through this process of ensuring compliance with the new rules, as long as, the institution has shown a concerted effort to comply with the new rules.

Now is a good to remind everyone to take a look at your mortgage lending program and ensure you are prepared to comply with the new rules.

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