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Lenders are increasingly anxious about how to deal with the Department of Housing and Urban Development's recent proposal concerning the definition of "qualified mortgages," noting the agency's plan differs in key respects from the CFPB's QM rule.
October 8 -
Revisions to banks' duties under the Home Mortgage Disclosure Act are coming soon, and they are meant to "ease the operational and technological burdens" of banks, the head of the Consumer Financial Protection Bureau said.
September 24
NEW ORLEANS — Most vendors should be able to comply with the Consumer Financial Protection Bureau's qualified-mortgage rule by January, Director Richard Cordray said Monday.
"We've been in close contact with vendors, and they are telling us they're going to be ready," Cordray said during a question-and-answer session at the American Bankers Association's annual conference. "Those that are not ready will be at a huge competitive disadvantage."
His comments appeared directed at bankers who have complained in recent months that vendor delays could interfere with their ability to comply with QM rules set to go into effect in January. Other bankers have expressed concerns that vendor issues are making it difficult to train employees.
To those bankers, Cordray reiterated his position that examiners will be flexible with banks that make "good faith" efforts to comply with the bureau's rules. "In the early months, if you are … working aggressively with your vendor, we are not expecting perfection," he said.
"We are all in this together, and so we appreciate the urgency that is being felt and the resources that are being mobilized to prepare for the approaching effective dates," Cordray said during his prepared remarks.
Cordray also took time to reemphasize efforts made by the CFPB to exempt smaller banks from certain aspects of the QM rule, notably those with less than $2 billion of assets and those that make 500 or fewer mortgages annually. "We made this change in our rules to reflect our deeply held view that community banks did not engage in the kinds of irresponsible practices that gave rise to the financial crisis," he said.
During his appearance, Cordray also drew attention to a trip he and other members of the CFPB's staff made to rural Nebraska. Matt Williams, chairman and president of Gothenburg State Bank and outgoing ABA chairman, had invited the bureau to visit his $122 million-asset bank.
"That visit shaped some of the contours of the mortgage rules," Cordray said.
Bankers gave scattered applause to Cordray, who attended the conference even though his staff had originally declined the association's invitation, citing his full schedule. In fact, the biggest Cordray-related applause came after a humorous remark by radio personality Bill Press earlier in the program.
"You cannot throw tomatoes at me this week," said Press, a liberal political commentator who is serving as the conference's master of ceremonies. "But you can throw tomatoes at Richard Cordray instead."
