CFPB Delays Compliance Date for Amended Rule on General Qualified Mortgage Definition

The CFPB delayed the compliance date for an amendment to the definition of the General Qualified Mortgage ("General QM") category under Regulation Z ("Truth in Lending Act"). The rule amendment went into effect on March 1, 2021; compliance is being delayed from July 1, 2021 to October 1, 2022.

As previously covered, the CFPB recently adopted amendments to replace the 43-percent limit on a consumer's debt-to-income ratio ("DTI") with a limit based on loan pricing, providing higher thresholds for (i) smaller loan amounts, (ii) certain manufactured housing loans and (iii) subordinate-lien transactions. As explained by the CFPB, for applications received between March 1, 2021 and October 1, 2022, creditors will have the option of complying with either the revised, price-based General QM definition or the DTI-based General QM definition.

The CFPB stated that it is delaying the compliance date in order to (i) help secure access to "responsible, affordable mortgage credit" and (ii) maintain flexibility for consumers economically impacted by the COVID-19 pandemic.

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