St Casimirs Mortgage Minute

ICBA Urges Legislative Fix for QM Concerns


ICBA continued its campaign for needed reforms to the Consumer Financial Protection Bureau’s “qualified mortgage” rules in a statement for the record for yesterday’s House Financial Services Subcommittee on Financial Institutions and Consumer Credit hearing.

While ICBA is encouraging the CFPB to modify the rule to better protect community bank balloon mortgages, a clean solution is needed, the association wrote in its statement. ICBA wrote that its Plan for Prosperity solution is simple and would preserve the community bank lending model.

The Plan for Prosperity—ICBA’s regulatory relief agenda for the 113th Congress—would provide safe harbor “qualified mortgage” status for community bank loans held in portfolio, including balloon loans in rural and non-rural areas. Community banks that hold loans in portfolio hold 100 percent of the credit risk and have every incentive to work with borrowers to structure the loans properly, ICBA noted in its statement.

ICBA thanked Rep. Blaine Luetkemeyer (R-Mo.) for including in the CLEAR Relief Act (H.R. 1750) a provision that would accord qualified mortgage status to mortgages originated and held in portfolio for at least three years by a lender with less than $10 billion in assets. The association noted that it strongly supports the bill because it contains this provision and other needed regulatory relief measures from the Plan for Prosperity.

The Plan for Prosperity is ICBA’s targeted legislative platform designed to ease excessive, redundant and costly regulations on community banks. Many of the Plan for Prosperity relief measures have been teed up in Congress. Therefore, ICBA is encouraging community bankers nationwide to urge their members of Congress to support the plan and help enact these important measures ---- ICBA