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Reg alert updates CU ATR/QM responsibilities, protections
ALEXANDRIA, Va. (3/17/14)--The National Credit Union Administration has reminded credit unions of the compliance responsibilities created by new Ability-to-Repay/Qualified Mortgage (ATR/QM) rules, and the protections offered to certain credit unions, in a new regulatory alert (14-RA-09).

The Consumer Financial Protection Bureau's ATR/QM rules became effective on Jan. 10, and apply to all federally insured credit unions. The rules require credit unions to assess a member's ability to repay for virtually all closed-end residential mortgage loans secured by a member's dwelling. Loans with terms that do not exactly match certain CFPB QM requirements, such as 40-year loans, or loans with points and fees exceeding the thresholds established by the rule, will not be purchased by government-sponsored enterprises.

The NCUA alert includes details on:
  • Which loans are covered by the rule;
  • Basic ability-to-repay requirements;
  • Eight factors credit unions must consider when making an ATR determination;
  • How QMs provide a safe harbor;
  • The different types of QMs;
  • Caps on QM points and fees;
  • How QMs protect against liability;
  • What makes a QM loan higher priced;
  • When prepayment penalties are allowed for QM loans; and,
  • What other guidance has been made available.
The agency said this latest regulatory alert supersedes and replaces  14-RA-01, released in January. The new release clarifies the points and fees limit for each loan amount threshold and types of charges included in ATR/QM calculations, the agency said. 14-RA-09 also references updated guidance for implementing the requirements of the rule, the NCUA added.

The letter also includes an updated ATR/QM small entity compliance guide, a general comparison chart of ATR and QM requirements, and a small creditor QM flowchart.

For the full letter, use the resource link.
Other Resources

NCUA Reg Alert 12-RA-09
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