The Dodd-Frank Act amended the Truth in Lending Act (TILA) to establish ability-to-repay (ATR) requirements in connection with the origination of most residential mortgage loans. They prohibit a creditor from making a residential mortgage loan unless the creditor makes a reasonable and good faith determination based on verified information that the consumer has a reasonable ability to repay the loan. TILA also defines a category of loans called QMs for which a creditor ‘‘may presume that the loan has met’’ the ATR requirements. 

In January 2013, the Bureau issued a final rule amending Regulation Z to implement TILA’s ATR requirements and define several categories of QM loans. One category of QMs defined by the ATR/QM Rule consists of General QMs. Another category of QMs defined by the January 2013 Final Rule, Temporary GSE QMs, consisted of mortgages that (1) comply with the ATR/QM Rule’s prohibitions on certain loan features and its limitations on points and fees and (2) were eligible to be purchased or guaranteed by either GSE while under the conservatorship of FHFA. The January 2013 Final Rule provided that the Temporary GSE QM loan definition would expire with respect to each GSE when that GSE ceases to operate under conservatorship or on January 10, 2021, whichever occurred first. 

In subsequent years, the Bureau issued several other rules related to ATR requirements and QM definitions. These included the General QM Final Rule on December 10, 2020. That rule removed the General QM loan definition’s DTI limit and replaced it with limits based on the loan’s pricing. It and a subsequent rule also extended the expiration date of the Temporary GSE QM loan definition, and it ultimately expired on October 1, 2022. 

As the Bureau continues to monitor market developments, the Bureau will evaluate whether any further adjustments to ATR requirements and QM definitions are warranted.