Fed governor says rules on mortgages should compatible

WASHINGTON Thu Feb 14, 2013 12:13pm EST

Federal Reserve Board of Governors member Daniel Tarullo speaks during an open board meeting at the Federal Reserve in Washington December 14, 2012. REUTERS/Kevin Lamarque

Federal Reserve Board of Governors member Daniel Tarullo speaks during an open board meeting at the Federal Reserve in Washington December 14, 2012.

Credit: Reuters/Kevin Lamarque

WASHINGTON (Reuters) - A top Federal Reserve official said on Thursday that regulators should consider making a new mortgage rule that would provide an exemption to risk-retention requirements compatible with an existing rule.

At issue is making a definition of a qualified residential mortgage compatible with the definition for qualified mortgages that was made earlier this year by the Consumer Financial Protection Bureau.

Federal Reserve Governor Daniel Tarullo told lawmakers it was "definitely the case" that regulators should consider making the two rules congruent.

The Consumer Financial Protection Bureau, in defining qualified mortgages, said they would be considered to meet requirements that lenders verify borrowers can repay loans.

A group of regulators is now working on a definition of qualified residential mortgages, which would be exempt from "skin in the game" rules requiring mortgage originators to keep a portion of securitized loans on their books.

(Reporting By Aruna Viswanatha and Emily Stephenson; Editing by Leslie Adler)

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