ABA Commends CFPB Action on QM Coverage for Rural, Underserved Areas

In a comment letter to the Consumer Financial Protection Bureau today, ABA expressed its support for the CFPB’s recent interim final rule that broadened the availability of certain special provisions for small creditors operating in rural or underserved areas. Under the interim rule, small creditors — or banks that made no more than 2,000 first-lien covered transactions and have less than $2 billion in assets — will be eligible for special Qualified Mortgage provisions if they originate at least one covered mortgage loan on a property located in a rural or underserved area in the prior calendar year.

ABA recommended that the bureau consider increasing the asset threshold limit to be considered a “small creditor” from $2 billion to $10 billion to allow more small institutions to take advantage of the regulatory relief the rule provides.

The association also urged the CFPB to revise the language of the rule to allow creditors to begin taking advantage of special QM provisions immediately after beginning to lend in a rural or underserved area. Without this clarification, ABA pointed out, banks that only recently began lending in rural or underserved markets would have to wait until the end of the calendar year to take advantage of the QM provisions.


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