On December 10, 2020, the CFPB issued two final rules relating to the qualified mortgage (QM) definition under the Truth in Lending Act and its implementing Regulation Z, referred to as the General QM Final Rule and the Seasoned QM Final Rule.  The effective date of both the General QM Final Rule and the Seasoned QM Final Rule was March 1, 2021, and the CFPB also established a mandatory compliance date for the General QM Final Rule of July 1, 2021.

Another category of QMs currently available under Regulation Z, referred to as the Temporary GSE QM loan definition, consists of loans that are eligible for purchase or guarantee by either the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation (collectively, the GSEs), while operating under the conservatorship or receivership of the Federal Housing Finance Agency (FHFA). Pursuant to a final rule issued on October 20, 2020, the Temporary GSE QM loan definition is scheduled to expire on (1) the mandatory compliance date of the General QM Final Rule or (2) with respect to each GSE when that GSE ceases to operate under the conservatorship of FHFA, whichever happens earlier.

On April 27, 2021, the CFPB issued a final rule extending the mandatory compliance date of the General QM Final Rule from July 1, 2021, to October 1, 2022. While the April 2021 Final Rule extends the General QM Final Rule’s mandatory compliance date, it does not change the General QM Final Rule’s effective date.

As previously noted, the General QM Final Rule was effective on March 1, 2021. For applications received on or after March 1, 2021, but before the mandatory compliance date of October 1, 2022, creditors that seek to originate General QM loans have the option of complying with either the revised, price-based General QM loan definition or the original, total monthly debt to total monthly income (DTI)-based General QM loan definition. Only the revised, price-based General QM loan definition is available for applications received on or after the October 1, 2022, mandatory compliance date.

Additionally, the April 2021 Final Rule affects the expiration of the Temporary GSE QM loan definition or “Patch.” Under the April 2021 Final Rule, the Temporary GSE QM loan definition will expire on October 1, 2022, or the date the applicable GSE exits conservatorship, whichever comes first. However, the practical availability of the Temporary GSE QM loan definition may be affected by policies or agreements created by parties other than the CFPB, such as the Preferred Stock Purchase Agreements (PSPAs), which include restrictions on GSE purchases that rely on the Temporary GSE QM loan definition after July 1, 2021.

The CFPB is also considering whether to initiate a rulemaking to revisit the Seasoned QM Final Rule. If the CFPB decides to do so, it expects that it will consider in that rulemaking whether any potential final rule revoking or amending the Seasoned QM Final Rule should affect covered transactions for which an application was received during the period from March 1, 2021, until the effective date of such a final rule. 

The CFPB has released additional resources regarding the Ability-to-Repay (ATR)/QM Rule, which includes an executive summary of the Final General QM and Seasoned QM Rules, updated charts and an updated small entity compliance guide.

These resources are available at the following link:
https://www.consumerfinance.gov/compliance/compliance-resources/mortgage-resources/ability-repay-qualified-mortgage-rule/

On March 11, 2021, the Federal Reserve, Farm Credit Administration, FDIC, NCUA, and OCC (joint agencies) proposed Interagency Questions and Answers Regarding Private Flood Insurance.
The proposal is intended to help lenders comply with the agencies' joint rule promulgated in 2019 to implement the private flood insurance provisions of the Biggert-Waters Flood Insurance Reform Act of 2012.

The proposal incorporates new questions and answers in several areas including:

• Mandatory Acceptance,
• Discretionary Acceptance, and
• Private Flood Insurance General Compliance

These FAQs supplement the 118 Interagency Questions and Answers Regarding Flood Insurance that the agencies proposed on July 6, 2020, which revised and reorganized the existing FAQs into new categories by subject to enhance clarity and understanding for users and introduced new FAQs on the escrow of flood insurance premiums, force placement of flood insurance, and the detached structures exemption.

The FAQ documents are intended to help lenders meet their responsibilities pursuant to the federal flood insurance laws that were last updated in 2011. Once finalized, the new FAQs will supersede the 2009 and the 2011 Interagency Questions and Answers, and supplement other guidance or interpretations issued by the agencies relative to loans in areas having special flood hazards.  Compliance Officers should closely review the FAQs to ensure flood insurance processes are up to date with the latest joint agency guidance to avoid costly flood insurance violations and penalties.  The maximum civil money penalty per flood insurance violation is $2,252.00 for each violation occurring on or after January 15, 2021. 

Review the July 6, 2020, proposed FAQs at the following link:
https://www.fdic.gov/news/press-releases/2020/pr20077a.pdf

Review the March 11, 2021, proposed private flood insurance FAQs at the following link:
https://www.fdic.gov/news/financial-institution-letters/2021/fil21016a.pdf

​On June 10, 2021, the CFPB posted a series of eight frequently asked questions (FAQs) on unauthorized electronic fund transfers and error resolution under Regulation E on a new Electronic Fund Transfers compliance resource webpage.
 
The FAQs address these topics:
 

• Fraudulent inducement to share account access information
• Consumer negligence and liability for unauthorized EFTs
• Modification or waiver of Regulation E protections
• Regulation E and private network rules
• Conditioning error investigations on police reports, etc.
• Requiring a consumer to contact the merchant before starting an investigation
• Determining consumer liability for unauthorized EFTs

 
These FAQs provide new insight and clarification on some key areas of Regulation E regarding EFT error resolution rules and commentary in Section 1005.11.  It is recommended that Compliance Officers closely review the new FAQs to ensure processes are up to date with current regulatory guidance and to avoid consumer harm in the EFT error resolution process. 
 
The FAQs can be viewed in their entirety at the following link:
 
Electronic Fund Transfers FAQs | Consumer Financial Protection Bureau (consumerfinance.gov)  

On May 18, 2021, the OCC announced through issuing OCC Bulletin 2021-24 that it will reconsider the final Community Reinvestment Act rule published on June 5, 2020, which applied to national banks and federal savings associations under its supervision.  While this reconsideration is ongoing, the OCC has indicated it will not object to the suspension of the development of systems for, or other implementation of, provisions with a compliance date of January 1, 2023, or January 1, 2024, under the 2020 rule.
 
At this time, the OCC also does not plan to finalize the December 4, 2020, proposed rule that requested comment on an approach to determine the CRA evaluation measure benchmarks, retail lending distribution test thresholds, and community development minimums under the June 2020 rule. In addition, the OCC is discontinuing the CRA information collection pursuant to the Paperwork Reduction Act (PRA) notice published in the Federal Register in December 2020.
 
Per the bulletin, while this reconsideration is ongoing, the OCC will not implement or rely on the evaluation criteria in the June 2020 rule pertaining to:

• Quantification of qualifying activities (12 CFR 25.07 and 25.08).
• Assessment areas (12 CFR 25.09).
• General performance standards (12 CFR 25.10 through 25.13).
• Data collection (12 CFR 25.21).
• Recordkeeping (12 CFR 25.25); and
• Reporting (12 CFR 25.26).

 
The bulletin also indicated the OCC will continue to implement the provisions of the June 2020 CRA rule that had a compliance date of October 1, 2020. The OCC interpreted and explained these provisions and implementation efforts in OCC Bulletin 2020-99, which include:

• Issuance of OCC Bulletin 2021-5 providing bank type determinations, lists of distressed and underserved areas, and the median hourly compensation value for community development service activities.
• Deployment of the CRA Qualifying Activities Confirmation Request process for banks and other stakeholders to request confirmation whether an activity meets the qualifying criteria under the June 2020 CRA rule; and
• Providing training on provisions of the June 2020 rule with the October 1, 2020, compliance date in a series of webinars for examiners and bankers.

 
The OCC’s actions are intended to provide for an orderly reconsideration of the June 2020 rule and provide banks with more flexibility to deploy resources in response to the COVID-19 pandemic. These actions also intend to provide the OCC with the opportunity to consider additional stakeholder input, to evaluate issues and questions that have been raised, to reassess the necessary data, and to take additional regulatory action, as appropriate.
 
Review the entire bulletin regarding the OCC’s reconsideration of its CRA rules at the following link:

https://www.occ.gov/news-issuances/bulletins/2021/bulletin-2021-24.html
​
OCC supervised institutions are reminded to maintain appropriate documentation for CRA examination purposes required under OCC Bulletin 2020-99. Such documentation includes the qualifying criteria met by the activity, the area(s) served by the activity, and the date and amount of the activity (including the basis for full or partial consideration). Certain banks previously subject to data collection and reporting under the 1995 CRA framework will continue to report large bank CRA data during the transition period, as specified in OCC Bulletin 2020-99.
​
Review the entire bulletin regarding the Community Reinvestment Act: Key Provisions of the June 2020 CRA Rule and Frequently Asked Questions at the following link:
​
https://occ.gov/news-issuances/bulletins/2020/bulletin-2020-99.htm