CFPB Issues Notice of ATR/QM Assessment and Requests Comment

May 25, 2017, the Consumer Financial Protection Bureau released details of its plan to assess the 2014 Ability to Repay (ATR) and Qualified Mortgage (QM) Standards (ATR/QM Rule) and requested comments. Comments are due by July 31, 2017.

The Dodd-Frank Act requires the CFPB to conduct an assessment of the rule’s effectiveness in meeting the purposes and objectives. The CFPB is also required to request comments on recommendations for modifying, expanding, or eliminating the rule.

The CFPB assessment plan includes examining the rules impact on the following consumer outcomes:

  • Mortgage cost
  • Origination volumes
  • Approval rates
  • Subsequent loan performance

Additional considerations will include changes creditors made to their underwriting policies and procedures in order to comply with the ATR Rule and how those changes impacted consumer outcomes.

The assessment will evaluate the “Temporary” QM status afforded to loans eligible for deliver to government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac, and the potential consequences of that provision’s expiration.

Attention will be paid to the outcomes for consumers who rely on income from self-employment, from assets, or from intermittent or seasonal work. Another focus area will be outcomes from other special groups such as low and moderate-income, rural, and minority borrowers.

The CFPB plan will rely on HMDA data, Fannie/Freddie public loan level data, servicing data, and the National Mortgage Database. Some creditors and stakeholders will receive limited requests for data.

The full text of this notice and request for comments is published in the federal register https://www.federalregister.gov/documents/2017/06/01/2017-11218/request-for-information-regarding-ability-to-repayqualified-mortgage-rule-assessment

Comments are requested on the following topics:

  • Feasibility and effectiveness of the assessment plan
  • Data and other factual information that may be useful when executing the plan
  • Recommendations to improve the assessment plan
  • Data and other factual information about benefits and costs of the ATR/QM rule for consumers, creditors and other stakeholders
  • Data and other factual informant about the rule’s impact on transparency, efficiency, access, and innovation in the mortgage market
  • Data and other factual information about the rule’s effectiveness in meeting its purpose
  • Recommendations for modifying, expanding, or eliminating the ATR/QM rule
  • 781-402-6406

Marissa Blundell, JD, principal, services as CLA Bankers Advisory’s chief operating officer, overseeing all quality control and compliance assessment services. She is a graduate of Skidmore College and New England School of Law. She is admitted to the Massachusetts Bar. Marissa provides compliance training to clients, conducts public training webinars, and speaks at state and regional industry events. She is co-chair of the Massachusetts Mortgage Bankers Association Legislative Committee and is a member of the Mortgage Action Alliance Steering Committee and the national Mortgage Bankers Association's Quality Assurance Committee.

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