ABA and two other trade groups urged CFPB Director Richard Cordray to delay the Ability-to-Repay/Qualified Mortgage rule taking effect in January for nine to twelve months.
As key details of the rule changed in the past year, financial institution software vendors and compliance specialists have had a hard time delivering products and systems in time for the compliance deadline.
As a result, “safety and soundness concerns will cause many lenders to reduce or stop lending until they are certain that they can do so in full compliance and without undue risk,” the groups said. “This risk includes not just safety and soundness risks but also liability from private rights of action and state attorneys general.”
The groups are also worried that a curtailing of mortgage lending would not be a temporary bump. “Some who vacate the mortgage lending business, particularly those in rural areas, may not return, causing further concentration of the industry and giving borrowers fewer choices both immediately and long term,” they added.
Read the letter.