CFPB Delays General QM Rule Effective Date

The Consumer Financial Protection Bureau today issued a final rule extending the mandatory effective date for its general Qualified Mortgage rule from July 1, 2021 to Oct. 1, 2022. With this action, the CFPB also extended the temporary “GSE patch” until the new mandatory compliance date or until Fannie Mae and Freddie Mac exit conservatorship, whichever comes first.

However, the bureau noted that “the practical availability of the temporary GSE QM loan definition may be affected by policies or agreements created by parties other than the bureau, such as the Preferred Stock Purchase Agreements, which include restrictions on GSE purchases that rely on the Temporary GSE QM loan definition after July 1, 2021.” (This statement followed an announcement from Fannie Mae and Freddie Mac earlier this month stating that any loans purchased by the GSEs after July 1, must conform to the requirements outlined in the QM final rule—effectively ending the GSE patch.)

The American Bankers Association and a broad coalition of consumer advocacy and financial and housing trade groups previously opposed an extension, noting that the rule was finalized with broad consensus across industry, civil rights and community groups and made clear and sensible reforms to the QM framework. The groups also cautioned that it could cause market disruption and considerably hamper banks’ compliance efforts.