At a dialogue with the CFPB at ABA’s Government Relations Summit, Kathleen Ryan, the CFPB’s Deputy Assistant Director for the Office of Regulations and Brian Webster, an Originations Program Manager at the CFPB, gave a regulatory overview, touching upon current issues including, but not limited to, QM, ability to repay and prepaid cards.
Regarding the QM rule, Ryan drew attention to the broader definition that the bureau has tailored to community banks, while Webster invited bankers to share how the QM rule has affected their mortgage lending activity. Webster added that the bureau has heard very little about financial institutions having to vastly change their mortgage lending practices so far.
The CFPB representatives pointed out that lending outside the QM mortgage is not forbidden; however, some bankers expressed concern about making non-QM mortgages as these loans could make institutions vulnerable to litigation risks, which is still an unknown at this time. Bankers also expressed continuing concern about the interplay between the QM rule and their ability to serve certain customers, suggesting that the QM requirements raise underwriting challenges and fair lending difficulties.
Find ABA QM resources.