WASHINGTON (10/23/13)--Offering only Qualified Mortgages "would not, absent other factors, elevate a supervised institution's fair lending risk," the National Credit Union Administration and other federal financial regulators said in a Tuesday joint statement.
The statement came in response to creditor questions to the agencies. Creditors, the regulators said, have asked for clarity regarding whether the disparate impact doctrine of the Equal Credit Opportunity Act (ECOA) and its implementing regulation, Regulation B, allows them to originate only QMs. Credit Union national Association representatives, including Deputy General Counsel Mary Dunn, raised this issue as recently as last week in meetings with the with the Consumer Financial Protection Bureau and NCUA.
The CFPB issued standards to define QMs under the agency's "ability to repay" rules, and mortgage servicing rules, in January.
In the joint release, the agencies noted that "the decisions creditors will make about product offerings in response to the Ability-to-Repay Rule are similar to decisions creditors have made with regard to other significant regulatory changes affecting particular types of loans."
Creditors, they said, "should continue to evaluate fair lending risk as they would for other types of product selections, including by carefully monitoring policies and practices and implementing effective compliance management systems." The same principles apply in determining compliance with the Federal Housing Agency and its implementing regulation, the release added.
The Federal Reserve Board, CFPB, Federal Deposit Insurance Corp., NCUA and the Office of the Comptroller of the Currency co-signed the joint statement.
For the full release, use the resource link.