The CFPB was one of five federal regulators issuing an interagency statement intended to address industry concerns regarding the fair lending risks associated with compliance with the CFPB’s ability-to-repay/qualified mortgage (QM) final rule. In addition to the CFPB, the other regulators issuing the statement were the OCC, Fed, FDIC and NCUA.
The statement advises creditors that the CFPB and other regulators “do not anticipate that a creditor’s decision to offer only Qualified Mortgages would, absent other factors, elevate a supervised institution’s fair lending risk.” While helpful, the conditional nature of this guidance means that creditors making only QMs will continue to face the possibility of fair lending challenges to their application of QM standards to protected class applicants. In addition, while regulators may initially be more temperate in exercising their supervisory and enforcement authority, creditors may, over time, feel increasing pressure to make non-QM loans, particularly once loans that are eligible for sale to Fannie Mae or Freddie Mac lose their temporary QM status.
For more on the interagency statement, see our legal alert.