ABA's Letter to CFPB on the Proposed Changes to the Qualified Mortgage Rule

The Honorable Kathleen L. Kraninger
Director
Consumer Financial Protection Bureau
1700 G Street, NW
Washington, DC 20552

Dear Director Kraninger:

Thank you for the opportunity to comment on the Consumer Financial Protection Bureau’s (Bureau) Notice of Proposed Rulemaking (NPR) on changes to the General Qualified Mortgage (QM) definition as part of the Bureau’s Ability-To-Repay/Qualified Mortgage (ATR-QM) Rule. American Bankers Association (ABA) commends the Bureau for prioritizing the task of replacing the Temporary GSE QM category (the GSE Patch) which will sunset in January 2021. This is a critical provision of the law that prevented major disruptions in banks’ implementation of the ability-to-repay standards in 2013. Amendments to the ATR-QM rule should seek to establish a clear and transparent set of guidelines, criteria, and compensating factors that are objective and policy-based, and independent of any institutional market player.

ABA supports the Bureau’s proposals, which would allow the temporary GSE patch to lapse, ease rigid definitions and ratios for debt and income, maintain safeguards against risky product features, exclude high cost loans, and strengthen the existing regulatory language around documentation and verification of income and assets to ensure that lenders underwrite these loans to properly consider and verify a borrower’s ability to repay. ABA embraces safe and sound lending practices, and our banks support markets in which well-crafted rules support effective consumer protection, access to affordable financing, and sustainable homeownership.

Download the comment letter to read the full text.