NCUA Issues Regulatory Alert Regarding Ability to Repay and Qualified Mortgage Rules

The National Credit Union Administration has issued a regulatory alert to all federally insured credit unions focusing on the Ability-to-Repay (ATR) and Qualified Mortgage (QM) requirements that go into effect on Friday, Jan. 10. 

The alert details information that credit unions need to know to implement the rules, and also provides helpful regulatory tips designed to make it easier to understand how and when the rules apply. The NCUA alert addresses:

  • Loans to which the ATR /QM rules do not apply.
    • Regulatory tip: Lien position is not a factor. This rule is also not limited to just the primary dwelling.
  • Basic ATR requirements, including the eight required underwriting standards.
  • Additional ATR considerations, such as making sure the evaluation of the borrower’s ability to repay are relevant to your market, field of membership, credit union and members.
  • How to verify the information you rely on to determine the borrower’s ability to repay.
  • Record retention and overall compliance with the ATR standards.
  • QM safe harbor, including an explanation of the different types of QM loans.
    • Regulatory tip: Credit unions are able to originate a non-QM loan as long as they comply with the ATR requirements.
  • Caps and fee limitations.
  • Prepayment penalties allowed under the rule (for state-chartered credit unions, if permitted by law).

The regulatory alert contains some clear, easy-to-understand guidance that could be helpful to credit unions that are still working to ensure they are in compliance with the rules, or for credit unions that want to feel more confident about the state of their compliance program. The full alert is available on the NCUA’s website here.


Questions? Contact the Compliance Hotline: 1.800.546.4465,

Posted in Compliance News, NCUA.