WASHINGTON Bankers and other lenders are strongly urging the Consumer Financial Protection Bureau to delay implementation of its "qualified mortgage" and other pending rules, warning that they will not be ready by the Jan. 10, 2014 deadline.
Many lenders are still waiting for vendors to update their systems as the CFPB continues to release amendments and clarifications to its ability-to-repay and QM rules. Although the industry welcomes the additional explanations from the agency, each change requires an update to their mortgage systems, operations and staff.
"Very few institutions, in my view, are really ready for the QM, and they have a long way to go before they have completely" complied, Paul Noring, a managing director in the valuations practice at Navigant Capital Advisors, which is owned by a service provider, told American Banker, an affiliate of Credit Union Journal. The industry is "really hoping there's a year extension because people have been inundated with regulatory changes over the last few years."
In recent months financial institution advocates have pressed the CFPB for more time, but the agency has given no signal it will delay the January implementation date. Many observers believe the CFPB is likely to be more flexible, particularly since Director Richard Cordray was confirmed by the Senate and its legal powers are no longer in doubt.
"There is a difference now relative to three months ago when the discussions with the CFPB had been about their 'statutory obligation' to now thoughtful listening," said Bob Davis, an executive vice president at the American Bankers Association. "There are no declarations that it can't be considered."
Publicly, CFPB officials have remained committed to the deadline. In a recent interview with American Banker, Cordray said he believes banks are making strides in implementing the mortgage rules. He made it clear the CFPB is trying to help with that effort.
But between now and January, the CFPB is expected to continue to clarify, and make adjustments to, its rules. It announced a second round of interim exam procedures earlier this month for a slew of mortgage rules, including QM. Bankers welcome the alterations but say they require additional resources to implement.
The American Bankers Association is asking for the CFPB to extend the implementation date to January 2015.
