CFPB to Assess Effectiveness of Qualified Mortgage Rule

The Consumer Financial Protection Bureau today released a plan to assess the effectiveness of its final Ability-to-Repay/Qualified Mortgage rule. The bureau’s review of the effectiveness of the rule is required by the Dodd-Frank Act, and comments on the plan will be accepted for 60 days after publication in the Federal Register.

The proposed assessment process would examine the rule’s effects on mortgage costs, origination volumes, approval rates and loan performance. The bureau also said it would consider how creditors’ underwriting policies and procedures have changed as a result of the rule. Of special interest are outcomes related to self-employed borrowers, borrowers with seasonal or intermittent income, borrowers seeking smaller-than-average loan amounts, borrowers who use asset-derived income to repay the loan, borrowers with debt-to-income ratios above 43 percent, lower-income borrowers, minority borrowers and borrowers in rural areas.

To conduct its assessment, the CFPB said it is planning “a limited request of data directly from creditors and other stakeholders” in addition to other data sources. The plan also includes interviews with creditors on their compliance activities. The American Bankers Association will carefully review the CFPB’s proposed assessment plan and will submit comments.