Regulatory relief

The agency’s plan to extend the "qualified mortgage" stamp of approval to more loans could help lenders that rely on alternative data and cushion the blow of other QM changes for Fannie Mae and Freddie Mac.

Policymakers have eased some rules and the Supreme Court recently dealt a blow to the Consumer Financial Protection Bureau. But as the landmark legislation approaches its 10th anniversary, the post-crisis regulatory regime has stayed largely intact.

The agency has proposed letting firms seek specific guidance, which can be applied to other institutions. But consumer groups worry the plan circumvents formal rulemaking.

Chris Dodd and Barney Frank said the legislation — nearing its 10th anniversary — put banks in position to be a stabilizing force during the coronavirus crisis.

The new regulation is intended as a workaround for banks affected by the 2015 decision that created legal uncertainty for loans sold across state lines.

The congressional showdown over the pace of rulemaking during the pandemic is a hardening of older positions on banking policy ahead of the 2020 elections, observers said.

The templates are meant to make it easier to obtain agency approval for small-dollar loan products and to accommodate mortgage servicers that want to provide online loss mitigation options.

The move is part of an effort by CFPB Director Kathy Kraninger to help smaller lenders by significantly raising loan thresholds for collecting and reporting mortgage data.

Measures that delay the Current Expected Credit Losses standard and reduce a community bank capital ratio are temporary, but the industry now sees an opening to argue that they should be permanent.

The agencies will give the industry another month to submit feedback on the so-called covered fund portion of the rule "in light of potential disruptions resulting from the coronavirus.”