The following Letter Type G, or variations thereof, was submitted by individuals or entities.
Letter Type G:
Re: Credit Risk Retention Re-Proposal
Dear Sirs and Madam:
On August 28, 2013, the Office of the Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System (the Board), Federal Deposit Insurance Corporation (FDIC), Securities and Exchange Commission (SEC), Federal Housing Finance Agency (FHFA), and the Department of Housing and Urban Development (HUD) (collectively, the Agencies) jointly issued a notice of proposed rulemaking (the Proposal) to implement § 941 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank or the Act) regarding credit risk retention including the Qualified Residential Mortgage (QRM).
The Proposal is a re-proposal of a proposed rule issued in the spring of 2011 on this subject. After intense push-back, the Agencies re-proposed the rule in 2013. The 2013 re-proposal represents an improvement from the original because it aligns the QRM definition with the QM standard finalized earlier this year by the CFPB.
Despite the improvements, we have several concerns with the re-proposal. In particular, we are deeply concerned with the Alternative QM-Plus Approach. This Alternative would require a loan qualifying for the QRM exemption to have a 30% down payment and subject the borrower to onerous credit history requirements. The following are just some of the arguments against the Alternative: