One month after regulators said they held varying levels of hope for approval of the final rule for qualified residential mortgages (QRM), the Board of Governors of the Federal Reserve will meet Oct. 22 to discuss the final rule.
The meeting is set for 3:30 p.m. and will be held in open session. More than a year ago, the QRM rule was re-proposed by the six regulatory agencies named in the Dodd-Frank Act to implement it. Now it appears that the process is nearing its end.
The QRM rule is an offshoot of Dodd-Frank provisions that require securitizers to retain at least 5 percent of the credit risk of the assets collateralizing asset-backed securities. The act requires regulators to establish criteria for QRMs, mortgages that will be exempt from the risk-retention requirements.
At a House Financial Services Committee hearing in September, the chairman of the Federal Deposit Insurance Corp. and the Comptroller of the Currency said they hoped to have a final rule by the end of the year. Federal Reserve Gov. Daniel Tarullo said the process was in the home stretch, but didn’t know if the final risk retention rule would be ready by the end of the year.
QRM criteria were proposed in 2011, but after backlash from the housing industry and consumer advocates, a new proposal was issued in August 2013.
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