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Federal Register / Vol. 86, No. 42 / Friday, March 5, 2021 / Proposed Rules complying with the Temporary GSE QM
loan definition, if the application for the covered transaction was received before either October 1, 2022 or the date the applicable GSE ceases to operate under conservatorship, whichever comes first.

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Reasons the General QM Final Rule Adopted the July 1, 2021 Mandatory Compliance Date The General QM Final Rule adopted a mandatory compliance date of July 1, 2021 because the Bureau concluded that this date would give creditors and the secondary market sufficient time approximately six months from the date the Bureau expected that final rule to be published in the Federal Registerto prepare to comply with the General QM
Final Rules amendments to the ATR/
QM Rule.64 The General QM Final Rule noted that the COVID19 pandemic had significantly disrupted the mortgage market.65 Nevertheless, the Bureau finalized a July 1, 2021 mandatory compliance date, taking into consideration market conditions at the time and concerns about the perceived negative effects of the Temporary GSE
QM loan definition on the market.
Some commenters on the Patch Extension Proposal 66 and the General QM Proposal 67 cited the pandemic in requesting that the Bureau take different approaches to extending the Temporary GSE QM loan definition and revising the General QM loan definition than the Bureau had proposed. Several commenters on the Patch Extension Proposal asked the Bureau to extend the Temporary GSE QM loan definition to expire several months after the date creditors would be required to transition from the old General QM loan definition to the new definition. Among the reasons cited for the request was that the pandemic was straining creditors resources and personnel, making it more 64 The Bureau stated that, with respect to the price-based thresholds in revised 1026.43e2vi, the Bureau understood that creditors currently calculate the APR and APOR for mortgage loans. The Bureau also stated that the revised consider requirements generally reflected existing market practices and that creditors currently used and were familiar with the verification standards that the General QM Final Rule adopted. The Bureau also concluded that the General QM Final Rule would be less complex to implement relative to other rules the Bureau has issued, such as the January 2013 Final Rule or TILARESPA Integrated Disclosure Rule. 85 FR
86308, 8638586 Dec. 29, 2020.
65 Id. at 8631315.
66 85 FR 41448 July 10, 2020. The Patch Extension Proposal was the proposed rule that the Bureau issued in connection with the Patch Extension Final Rule.
67 85 FR 41716 July 10, 2020. The General QM
Proposal was the proposed rule that the Bureau issued in connection with the General QM Final Rule.

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difficult for creditors to adapt to the new definition. A few of these commenters stated that an overlap period, during which creditors could continue to make QMs under the Temporary GSE QM loan definition after the date creditors would be required to transition to the revised General QM loan definition, would reduce the potential that a revised General QM loan definition could disrupt the mortgage market and affect credit access due to unforeseen changes in the economy or the mortgage market due to the pandemic.68
The Bureau declined to adopt an overlap period in the Patch Extension Final Rule. The Bureau concluded that establishing an overlap period that extends past the date creditors are required to transition from the thencurrent General QM loan definition to the revised General QM loan definition would keep the Temporary GSE QM
loan definition in place longer than necessary to facilitate a smooth and orderly transition to a revised General QM loan definition. The Bureau stated that it sought to maintain the Temporary GSE QM loan definition only as long as necessary to facilitate a smooth and orderly transition to a revised General QM loan definition, and no longer, because the Bureau concluded that the Temporary GSE QM loan definition has certain negative effects on the mortgage market, including stifling innovation and the development of competitive private-sector approaches to underwriting. The Bureau further concluded that, as long as the Temporary GSE QM loan definition continued to be in effect, the non-GSE
private market was less likely to rebound and that the existence of the Temporary GSE QM loan definition may have been limiting the development of the non-GSE private market. For these reasons, the Bureau concluded that it was appropriate for the Temporary GSE
QM loan definition to remain in place no longer than the date creditors are required to transition from the thencurrent General QM loan definition to the revised General QM loan definition.69 The Bureau also cited these negative effects in declining to make the Temporary GSE QM loan definition permanent. 70 With respect to commenters concerns related to the 68 85

FR 67938, 67949 Oct. 26, 2020.
at 67951. Several commenters on the General QM Proposal also requested that the Bureau adopt an overlap period. The Bureau declined to adopt an overlap period in the General QM Final Rule for the same reasons it declined to adopt an overlap period in the Patch Extension Final Rule.
85 FR 86308, 86385 Dec. 29, 2020.
70 85 FR 67938, 67953 n.141 Oct. 26, 2020.
69 Id.

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pandemic, the Bureau stated that conditions in the mortgage market did not justify extending the Temporary GSE QM loan definition past the date creditors would be required to transition from the then-current General QM loan definition to the revised definition, particularly in light of the aforementioned concerns the Bureau stated about the negative effects of the Temporary GSE QM loan definition on the mortgage market.71
In the General QM Final Rule, several industry commenters requested a longer implementation period than the sixmonth period the Bureau proposed.
Some of these commenters stated that the implementation period should account for other simultaneous challenges for creditors, including responding to the COVID19 pandemic and its economic effects. The Bureau concluded that a six-month implementation period would give creditors and secondary market participants enough time to prepare to comply with the final rule, even in light of these challenges. The Bureau stated that current market conditions did not require a longer implementation period.72
In addition, two commenters that submitted a joint comment letter on the Patch Extension Proposal stated that the Temporary GSE QM loan definition should remain in place until the Bureau assesses the impacts of the pandemic on mortgage markets, including the decline of the non-QM market and creditors increasing reliance on GSE and FHA
loans.73 In their comments on the General QM Proposal, some consumer advocate commenters and an individual commenter requested that the Bureau pause the General QM rulemaking in light of the pandemic. The consumer advocate commenters cited the turmoil and economic fallout from the pandemic as a reason to pause the rulemaking.74
The Bureau declined to extend the Temporary GSE QM loan definition indefinitely while the Bureau further assessed the impact of the pandemic or to pause the General QM rulemaking in light of the pandemic. However, in the Patch Extension Final Rule, the Bureau noted that, if market conditions were to change or other circumstances were to arise before the Bureau issued the General QM Final Rule, the Bureau could extend the Temporary GSE QM
71 Id.

at 67953.
FR 86308, 86385 Dec. 29, 2020.
73 85 FR 67938, 67950 Oct. 26, 2020.
74 85 FR 86308, 86333 Dec. 29, 2020.
72 85

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