The Consumer Financial Protection Bureau's announcement that it was considering requiring more mortgage data from banks to determine whether loans meet the criteria to be considered qualified mortgages could help banks convince the CFPB that such criteria are too stringent. That, in turn, could force the CFPB to allow more loans to qualify for QM status.

At the same time, however, banking industry officials are concerned about privacy issues if the CFPB makes too much of the new information public. They note that the agency is considering collecting information on a borrower's age, credit score, debt-to-income ratio, length of the loan, and pricing structure.

"If someone wants to work hard, they can reverse engineer the data and figure out who the loan applicants are so if credit score and other information is added to the survey, that really presents privacy concerns," said Richard J. Andreano, Jr., Practice Leader of Ballard Spahr's Mortgage Banking Group. "That's probably going to be one of bigger issues raised."

Mr. Andreano added that because the CFPB hasn't issued a formal proposal yet, and because the industry will push for more time to implement any final regulation, "it will be a few years out before we start seeing the results of this."

Related Practices

Consumer Financial Services
Mortgage Banking