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13
CREDIT UNIONS STRAPPED BY CFPB RULE
e Consumer Financial Protection Bureau's
(CFPB) ability-to-repay/qualified mortgage rule
is making business difficult for credit unions,
according to a letter issued by Ann Kossachev,
Regulatory Affairs Counsel for the National
Association of Federally-Insured Credit Unions
(NAFCU) in August. e NAFCU's members
say they are "troubled by the growing cost of
mortgage lending" due to the rule.
According to Kossachev's letter, the CFPB's
QM rule has become a financial burden to
credit unions—one that's made it hard to
adequately serve American homebuyers.
"e rule has forced some credit unions
to increase their staff and has constrained
their capacity to provide nonconforming
loans, which has hurt credit unions' ability to
provide financial services to the underserved
populations that need it most," Kossachev
wrote. "e CFPB's failure to recognize the
unique structure of credit unions and tailor
regulations accordingly has caused significantly
higher compliance costs for credit unions across
the country."
According to Kossachev, the rule has even
forced some credit unions to cease operation.
"In response to the rule, some credit
unions have been forced to stop their mortgage
operations altogether because they could
not afford to take on the significantly higher
compliance burden," she wrote. "Others simply
stopped offering non-QM loans or greatly
reduced their origination of nonconforming
loans."
Kossachev also provided a few suggestions
for revising the rule, including making the
temporary GSE-qualified mortgage category
permanent and modifying the debt-to-income
threshold.
"Now is the time for the CFPB to re-
evaluate the logic behind its arbitrary 43 percent
DTI threshold," she wrote. "NAFCU requests
the CFPB increase this DTI threshold to at
least 45 percent, but preferably 50 percent, to
align with Fannie Mae's new standard and allow
credit unions greater flexibility to serve low- and
moderate-income individuals."
In the letter, Kossachev also suggests
modifying the points and fees system, which is
"confusing and unnecessarily complex."
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