If you've been following the debate on the "qualified mortgage" rulemaking by the Consumer Financial Protection Bureau, you know there's a big question about whether it will have a "rebuttable presumption" or a safe harbor for lenders.

CFPB Director Richard Cordray said in testimony before the House Financial Services Committee that the agency is still deciding which way to go on that issue, but "differences in safe harbor and rebuttable presumption are in some ways overstated" and "we are going to try to minimize litigation risk and draw some bright lines," reports American Banker’s Kate Davidson.

Lenders have been pushing for the maximum protection of a safe harbor for the QM standard, which would protect them from suits about failing to verify ability to pay.

“The industry has warned that anything short of a safe harbor for lenders could cause some of them to tighten lending standards or exit the mortgage market altogether amid litigation fears, which would limit credit availability,” writes Davison.

For the full piece see "Cordray Downplays Potential Litigation Risk from Contentious Mortgage Rule" (may require subscription).