ICBA and 45 state trade associations representing thousands of community banks strongly urge the Consumer Financial Protection Bureau to revise the current ability-to-repay/qualified mortgage (QM) rules and escrow requirements for higher-priced mortgage loans to allow community bank mortgage loans held in portfolio for the life of the loan to receive automatic QM safe harbor status and an exemption from the escrow requirements if the loans are higher priced.

In a letter sent to the CFPB on Tuesday, the associations highlight how community banks operate under a completely different business model and incentives than those of the largest financial institutions and nonbank mortgage companies. Importantly, ICBA and the state associations pointed out to the CFPB how community banks operate based on firsthand knowledge of their customers and communities, thriving on the strength of their reputation-factors that give every community bank strong incentives to make fair, safe and affordable loans for their customers.