Comments Submitted to the CFPB on the Qualified Mortgage Definition

CFA and Four Other Consumer Advocacy Groups Voice Their Concerns on the Qualified Mortgage Definition under the Truth in Lending Act

Washington, D.C. – Following the Consumer Financial Protection Bureau’s advanced notice of proposed rulemaking, CFA and other consumer advocacy groups submitted comments highlighting their concerns on possible revisions to the Qualified Mortgage (QM) definition and the expiration of the GSE patch.

In the letter, the groups stressed the importance of the Bureau keeping the dual purposes of the Dodd-Frank Act mortgage origination rules, access and ability to repay, front and center. As the Dodd-Frank Act recognized, access to responsible, affordable credit, which builds wealth, is dependent on creditors making reasonable determinations of ability to repay. Access to un-affordable credit is destructive, as the financial crisis that led to the Dodd-Frank Act showed.

The letter also highlighted six principles representing key tenets for the Bureau’s QM rulemaking:

  • The Bureau has a dual mandate regarding mortgage regulations; to promote access to responsible, affordable credit, and to ensure that mortgage loans are offered on ability to repay
  • Ability to repay must remain part of the Qualified Mortgage to protect borrowers.
  • Credit risk is distinct from the statutory requirement of consideration of ability to repay.
  • Restrictions on high-risk products and features should not be altered.
  • Seasoning is not an ATR measure.
  • A single DTI threshold in the absence of the patch or other broader underwriting would undermine the statute and constrict access to credit.