CUNA hopeful after CFPB reshapes ability-to-repay rules
Feeling a bit daunted by an influx of new mortgage regulations, credit unions took the proactive approach with the Consumer Financial Protection Bureau, informing them of the industry's concerns throughout the year.
As of today, it seems this approach is panning out. On Wednesday, the CFPB released final amendments for the ability-to-repay rule, creating exceptions for small creditors, community development lenders and housing stabilization programs.
Shortly after the release, the Credit Union National Association's (CUNA) President and CEO Bill Cheney said, "We are hopeful these adjustments will enable more credit unions to continue to meet their members' borrowing needs in a way that minimizes risk and default."
Among other provisions, the amendments include an exception for certain small lenders who want to extend loans with debt-to-income ratios above the 43% qualified-mortgage threshold.
Additionally, the CFPB said it's delaying the launch of a new regulation that prohibits creditors from financing credit insurance premiums in connection with certain mortgages.
In response, CUNA's Cheney said, "The CFPB's six-month delay of the provision on financing credit insurance premiums is key in that it will give credit unions more time to sort out what has proved to be a confusing element of the Dodd-Frank law."
CUNA is currently reviewing the changes and expects to release its final analysis in a few days.