What criteria does the CFPB use to assess QM effectiveness?

The Consumer Financial Protection Bureau (CFPB) assesses the effectiveness of Qualified Mortgages (QM) using a combination of borrower protection levels and lending volume metrics. This approach helps ensure that the QM regulations are meeting their intended goals of promoting responsible lending while still facilitating access to credit for consumers.

By focusing on borrower protection levels, the CFPB can evaluate whether the QM standards are adequately safeguarding consumers from predatory lending practices and ensuring that loans are made based on borrowers' ability to repay. Additionally, examining lending volume metrics allows the CFPB to understand how these regulations impact the overall mortgage market and access to credit for various demographics. This dual focus helps in determining how effectively the QM rules are functioning in practice and whether adjustments are needed to better serve both consumers and lenders.

Other options do not align with the CFPB's comprehensive assessment strategy. For example, solely considering the number of loans issued might overlook critical factors such as the quality and sustainability of those loans or the protection of borrowers’ interests. Evaluating trends in interest rates or the age of the lender lacks relevance to the effectiveness of the QM standards themselves. Therefore, the integration of borrower protection and lending volume presents a well-rounded framework for the CFPB's evaluation of QM effectiveness.