On 3/3/21, the CFPB announced the release of a proposed rulemaking to delay the recently set mandatory compliance date of the General Qualified Mortgage (QM) final rule from July 1, 2021 to October 1, 2022. The CFPB states they are proposing to extend the compliance date to ensure homeowners struggling with the financial impacts of the COVID-19 pandemic have the options they need.

On 2/23/21, the CFPB issued a statement that they are considering whether to initiate a rulemaking to revisit the recent Seasoned QM Final Rule. If it does, the CFPB stated that it expects it will consider whether “any potential final rule revoking or amending the Seasoned QM Final Rule should affect covered transactions for which an application was received during the period from March 1, 2021, until the effective date of such a final rule.” Additionally, the CFPB announced that they intend to issue a proposed rule that would delay the July 1, 2021 mandatory compliance date of the General QM Final Rule. If this upcoming proposed rule becomes finalized, creditors would have a choice to use either the current GM QM loan definition or the revised GM QM loan definition for applications received from March 1, 2021 through the extended mandatory compliance date (unless a GSE ceases to operate under conservatorship prior to the extended mandatory compliance date).

On 1/29/2021, the CFPB issued a final rule that exempts certain insured depository institutions and insured credit unions from the requirement to establish escrow accounts for certain higher-priced mortgage loans (HPMLs). This final rule implements a requirement of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA).

According to the CFPB’s release, the final rule takes effect upon publication in the Federal Register and exempts from the HPML escrow requirement any loan made by an insured depository institution or insured credit union and secured by a first lien on the principal dwelling of a consumer if (1) the institution has assets of $10 billion or less; (2) the institution and its affiliates originated 1,000 or fewer loans secured by a first lien on a principal dwelling during the preceding calendar year; and (3) certain of the existing HPML escrow exemption criteria are met.

On December 22, 2019, the CFPB announced the annual adjustment to the asset size threshold for small creditors under Regulation Z. This threshold applies to both the exemption to the requirement to establish an escrow account for higher-priced mortgage loans as well as the thresholds for small creditors to originate small-creditor portfolio and balloon-payment qualified mortgages.

On 12/10/2020, the CFPB issued two new final rules that update the Qualified Mortgage (QM) rules. Specifically, some changes have been made to the QM definitions in order to transition away from the “Temporary GSE” QM definition which is set to expire in the coming months. As you would expect, this topic will be covered in our upcoming Winter 2021 Quarterly Compliance Update that will be available in our store in early 2021.

On 10/20/2020, the Consumer Financial Protection Bureau (CFPB) issued a final rule to extend the Government-Sponsored Enterprise (GSE) Qualified Mortgage (QM) definition, known as the “GSE Patch”, until the upcoming amendments to the General Qualified Mortgage QM definition are finalized. The GSE Patch was set to expired on 1/10/2021, and this extension of the GSE QM definition will ensure a smooth transition for those who rely on secondary market underwriting for many of their Qualified Mortgages.

On 8/18/2020, the CFPB issued a proposal to create a new category of seasoned qualified mortgages, referenced as “Seasoned QMs.” According to the CFPB’s release, loans could qualify as Seasoned QMs if they are “first-lien, fixed-rate covered transactions that have met certain performance requirements over a 36-month seasoning period.”

In July of 2020, the CFPB published a number of annual threshold adjustments in the Federal Register related to Regulation Z. Effective January 1, 2021, a Regulation Z final rule implements the Truth in Lending Act and satisfies the CFPB’s requirement to calculate annually the dollar amounts for several provisions in Regulation Z. While most of these thresholds will most likely be updated by a financial institution’s loan operating software (LOS) provider, managers should ensure these threshold changes are appropriately made.