Delay of price-based general QM mandatory compliance date

As noted in an earlier blog, the Consumer Financial Protection Bureau (Bureau) had proposed to delay the mandatory compliance date of the price-based general qualified mortgage (QM) rule, which was finalized last December. Before the rule was finalized, the definition of a general QM under Regulation Z involved a standard based on a 43% debt-to-income (DTI) limit. The final rule substituted a price-based standard that compares the annual percentage rate versus the average prime offer rate. As long as the annual percentage rate does not exceed the average prime offer rate by more than the thresholds permitted by the rule, which are described in this NAFCU compliance blog from December, a loan can satisfy the price-based general QM definition.

Under the December 2020 final rule, the effective date of the price-based general QM definition was March 1, 2021, and the rule set July 1, 2021 as the mandatory compliance date. For applications received on or after March 1, 2021 but before July 1, 2021, the final rule permitted credit unions to choose whether to comply with the DTI-based general QM definition or with the price-based general QM definition. The effect of the rule also permitted credit unions to rely on the definition of temporary QMs sold to government sponsored entities (GSE patch) until July 1, 2021.

Late last month, the Bureau finalized the rule delaying the mandatory compliance date of the price-based general QM definition. The rule pushes the mandatory compliance date of the price-based general QM definition to October 1, 2022.

 

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