Ari   Karen
Principal

Contact

Phone: 240.507.1740
Fax: 240.507.1735
Mailing: 4800 Montgomery Lane ,
8th Floor , Bethesda , MD   20814
Linkedin: Ari Karen

PRACTICE FOCUS

Ari Karen is an experienced litigator and speaker who has focused his practice in representing financial institutions in both government investigations and litigation before state and federal trial and appellate courts nationwide.

Mr. Karen's practice is diverse, representing clients on matters concerning banking regulations, Dodd Frank financial reform laws, contractual disputes, employment and labor statutes, wage-hour class actions, employment discrimination and fair lending matters, whistleblower complaints and non-competition claims, among others.

In addition to being known for aggressively advocating on behalf of his clients, Mr. Karen is widely complimented for his business friendly attitude and creativity, advising clients on legal and regulatory compliance in a manner that is practical and sensitive to business considerations. Mr. Karen's approach affords his clients the opportunity to remain both compliant and competitive in an environment with ever increasing business and legal challenges.

Mr. Karen is a principal in the firm in its Financial Institutions Regulatory and Labor and Employment practice groups. He is also the Founder and CEO of Strategic Compliance Partners (SCP). SCP is an attorney-driven, price-fixed mortgage compliance consulting firm which provides a total compliance solution for lenders.

Mr. Karen is a sought after national speaker and published writer to audiences nationwide. His speaking engagements include talks to members of CMLA, Lenders One and mortgage groups and associations in Texas, California, the Carolinas, Illinois, Indiana, Michigan, Missouri, New Jersey, Pennsylvania, Massachusetts, New York, Florida, Maine, Ohio, Maryland, Kansas, Arizona, Rhode Island and Vermont. A published writer, Mr. Karen writes a weekly blog on "Compensation and Compliance Matters," in the National Mortgage News, one of the leading on line publications to the mortgage banking industry.

POINTS OF DISTINCTION

Mr. Karen has won precedent-setting decisions against the United States Equal Opportunity Commission, blocking the EEOC’s efforts to establish that employers could be held liable for violations of Title VII as far back as the passage of the legislation in 1964. He has also counseled several mortgage banks and financial services firms on the development and implementation of cutting edge policies and procedures. These procedures have allowed institutions to remain compliant with all wage hour laws without disrupting proven business models or undermining their competitive advantages.

PUBLICATIONS/SPEECHES

Mr. Karen has written and spoken extensively on the Civil Rights Act of 1964, the Americans with Disabilities Act, the Age Discrimination in Employment Act, Independent Contractors, and the Fair Labor Standards Act, among others. He has spoken before the Empire State Banking Association, and Mortgage Banker and Broker Associations for New York, Pennsylvania, Maryland, Florida, Maine, and New Jersey. Mr. Karen has delivered speeches to human resources groups, and is frequently asked to speak on nationwide audio conferences and webinars. Mr. Karen’s work as a labor lawyer has been repeatedly recognized, and has been quoted and/or published in Dealer’s Edge Car Magazine, Employment Law360, Washington SmartCEO, Baltimore SmartCEO, MBA NewsLink, and Employee Benefit Plan Review.

 

Register for Ari Karen’s monthly Lender Legal Update conference call here  

Education & Admissions

  • J.D. (with distinction), Emory University, 1996
  • B.A. (cum laude), University of Maryland, 1992
  • District of Columbia
  • State of Maryland
  • State of Georgia
  • United States District Court for the District of Maryland
  • United States District Court for the District of Columbia
  • United States District Court for the Northern District of Georgia
  • United States Court of Appeals for the Fourth Circuit
  • United States Court of Appeals for the Tenth Circuit
  • *New York State (pending)

Posts

"Appellate Court Rules CFPB Structure is Unconstitutional"

In a long-awaited decision in the case of PHH Corporation v. CFPB, the U.S. Court of Appeals for the District…

"Compensation and Compliance Matters: What does President-elect Trump mean for lenders?"

So. President-elect Trump. Not many thought they would hear those words. But what does it mean for lenders? The reality…

"Compensation and Compliance Matters: Bank Statement Loans Are Only as Safe as the Lenders Originating Them"

As consumers increasingly accept nontraditional jobs and move away from standard, well-documented income patterns, mortgage lenders are faced with an…

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"Compensation and Compliance Matters: Lending Loopholes Could Lead to UDAAP Traps"

The Consumer Financial Protection Bureau’s recent victory against an online loan servicer serves as an important lesson both as to the CFPB’s…

"Compensation and Compliance Matters: Regulators’ Down Payment Disconnect Puts Strain on Homeownership"

Amid the constant regulatory ambiguity that has become commonplace for lenders since 2011, they have also received two distinctly different…

"Compensation and Compliance Matters: Compliance Is Everyone’s Responsibility"

Lenders have been struggling for some time with convincing business partners and employees that the Consumer Financial Protection Bureau’s reach…

"How the FLSA Affects the Mortgage Industry"

Recently, I heard in the news about a two million dollar settlement from a single business unit of large bank…

"Compensation and Compliance Matters: CFPB Warns Against LO Comp Accidentally Leading to Elder Abuse"

Over the last several months the Consumer Financial Protection Bureau has focused on financial abuse impacting older Americans. In March,…

"Compensation and Compliance Matters: No-Action Letters"

The Consumer Financial Protection Bureau finally released in February its long-awaited policy pertaining to no-action letters for financial products and…

"Compensation and Compliance Matters: Court Ruling Reignites Underwriter Compensation Fight"

Whether certain loan officers are exempt from minimum wage and overtime compensation is an argument that is officially entering into…

"Compensation and Compliance Matters: Auto Lending Settlement Justifies Pricing Discretion in Mortgages"

Compliance experts have long disagreed about how much, if any, discretion loan officers have in pricing loans to consumers. But…

"Compensation and Compliance Matters: Avoiding Compliance Blind Spots"

The Consumer Financial Protection Bureau recently issued general policy objectives, which included goals related to mortgages. The main focus of…

"Compensation and Compliance Matters: Lenders, You Are Your Vendors’ Keeper"

With consumers given the green light to sue lenders over the third-party vendors that they expose to borrowers, lenders have…

"Compensation and Compliance Matters: In 2016, Worry Less About MSAs and More About Compensation"

While marketing services agreements caused a stir during the second half of 2015, the mortgage industry has a more pressing…

"Compensation and Compliance Matters: Rose-Tinted Cost Estimates Will Have Regulators Seeing Red"

Overly optimistic assumptions that can create false impressions for borrowers can easily rise to the level of an unfair and…

"Compensation and Compliance Matters: Why Expanded QM Exemption for Small Lenders Doesn’t Go Far Enough"

The Consumer Financial Protection Bureau’s recent change to the definition of small creditor, while seemingly poised to make room for…

"Compensation and Compliance Matters: Home Mortgage Disclosure Act Data Disclosures Pose Risks for Lenders and Borrowers"

When the Consumer Financial Protection Bureau issued its long-awaited final Home Mortgage Disclosure Act rule last week the amount of…

"Compensation and Compliance Matters: Why MSAs Are More Trouble Than They’re Worth"

The guidance that the Consumer Financial Protection Bureau issued recently on marketing services agreements is fuzzy, at best. Because the…

"Compensation and Compliance Matters: Fair Lending Lawsuit Could Affect Disparate Impact"

The city of Miami was recently found to have standing to sue lenders under the Fair Housing Act in a…

"Compensation and Compliance Matters: Lenders Better Have a Good Reason for TRID Estimate Change"

What exactly is an “extraordinary” or “other unexpected event” under the TILA-RESPA integrated disclosure rules? The new definition of “changed…

"Compensation and Compliance Matters: Loan Officer Comp Rules Obscured by ‘Unforeseeable Circumstances’"

Under the current loan officer compensation rules, one point that isn’t completely clear is whether a lender may charge LOs…

"Compensation and Compliance Matters: Three Regulators Are Scarier than One"

In the latest example of exemplary coordination between other federal agencies and various states, the Consumer Financial Protection Bureau, the…

"Compensation and Compliance Matters: Here’s One Thing the CFPB Gets Right"

There are many concerning aspects of the Consumer Financial Protection Bureau’s methods, not the least of which include its proclivity…

"Compensation and Compliance Matters: Ambiguities Remain Around MSAs"

By now everyone knows that at least two major lenders have pulled out ofmarketing services agreements with realtors following the…

"Compensation and Compliance Matters: Does Nova Audit Sound the Death Knell for Bond Loan Programs?"

An audit released by the Department of Housing and Urban Development last week found that NOVA Financial & Investment violated…

"Compensation and Compliance Matters: JPMorgan Enforcement Action Solidifies CFPB Negligence Standard"

When the concept of unfair, deceptive, or abusive acts or practices was first introduced, many assumed it would target companies…

"Compensation and Compliance Matters: CFPB Strong-Arms Statute Of Limitation, Referrals"

In the first-ever appeal from the decision of an administrative law judge, Consumer Financial Protection Bureau Director Richard Cordray imposed…

"Compensation and Compliance Matters: Argument Against LO Comp Law Misses the Point"

The mortgage industry continues to spin its tires thanks to a certain kind of sophomoric mindset: that just because consumers…

"Compensation and Compliance Matters: CFPB Gets Serious on Loan Officer Comp"

For years, many have been asking when the Consumer Financial Protection Bureau was going to get aggressive when it comes…

"Compensation and Compliance Matters: Unmonitored TPO Pricing Discretion"

Uncontrolled, unmonitored loan pricing discretion in the hands of third parties will often lead to significant fair lending problems. If…

"Compensation and Compliance Matters: The TRID Loophole The CPFB Says Is Legit"

Anyone who’s closely read the nearly 1,900-page final rule for the TILA-RESPA Integrated Disclosures likely noticed a nifty loophole when…

"Compensation and Compliance Matters: Don’t Play Telephone with Vendor Oversight"

Mortgage professionals may have overlooked the Consumer Financial Protection Bureau’s recent $120 million consent orders to resolve allegations of illegal…

"Compensation and Compliance Matters: Minimum Requirements of Appraisal Management Companies"

The final rules pertaining to minimum requirements of appraisal management companies were released last week. These rules do not specifically…

"Compensation and Compliance Matters: How Quality Customer Service Can Keep Mortgage Lenders Compliant"

The consent decree the Consumer Financial Protection Bureau entered into with Green Tree Servicing involves $48 million in restitution and…

"Compensation and Compliance Matters: How to Survive a GSE Audit"

Fannie Mae and Freddie Mac have begun playing for keeps when it comes to compliance, and this appears to be…

"Compensation and Compliance Matters: CFPB Zeroes in On Mortgage Advertising"

Last week, RMK Financial Corp. agreed to a $250,000 fine in a consent decree pertaining to direct mailings to consumers.…

"Compensation and Compliance Matters: Overtime and Outside Loan Officers"

The recent U.S. Supreme Court decision upholding the Department of Labor interpretation concerning the exempt status of loan officers does…

"Compensation and Compliance Matters: CFPB Enforcement Action Trends to Watch Closely"

The Consumer Financial Protection Bureau released a supervision report in March that highlighted the agency’s enforcement action and other supervisory…

"Compensation and Compliance Matters: Pre-Approvals Will Soon Be Worthless"

There was an avalanche of responses to my recent piece, The End of the Pre-Approval. Many of those comments expressed…

"Compensation and Compliance Matters: Clarifying the Department of Labor’s Loan Officer Ruling"

The U.S. Supreme Court recently reversed the D.C. Circuit court decision that had determined that the process by which the…

"Compensation and Compliance Matters: The End of the Pre-Approval"

While many lenders focus upon the new integrated disclosures, one of the less-cited aspects of the regulations prohibits lenders from…

"Compensation and Compliance Matters: The CFPB Will Not Be Ignored"

Lenders are expected to put systems in place to affirmatively detect and remedy deficiencies before consumers are harmed. The Consumer…

"Compensation and Compliance Matters: The Relationship between Marketing and UDAAP"

Lenders must carefully ensure that all potential motivations for advice, recommendations, and referrals are provided to borrowers, as the Consumer…

"Compensation and Compliance Matters: Deceptive Acts and Practices Enforcement Keeps Coming"

The Consumer Financial Protection Bureau last week entered into consent decrees with two credit card issuers over deceptive acts and…

"Compensation and Compliance Matters: Don’t Oversimplify MSA Compliance Issues"

I have heard many in the industry make the comment that marketing agreements are illegal. With all due respect, as…

"Compensation and Compliance Matters: RESPA & Section 8- Another Wake-up Call"

Last week, the Consumer Financial Protection Bureau entered into a consent decree with Wells Fargo for over $34 million as…

"Compensation and Compliance Matters: Did the CFPB Really Just Say That?"

The Consumer Financial Protection Bureau recently issued a report showing that nearly half of all borrowers did not comparison shop…

"Compensation and Compliance Matters: How Buying Leads Could Infringe on RESPA"

Lenders should exercise caution when purchasing leads to ensure that they are not actually paying for referrals as prohibited by…

"Compensation and Compliance Matters: More False Claims Act Lawsuits Lie Ahead"

A recent group of Federal Housing Administration settlements with lenders serve as a reminder that False Claims Act lawsuits are…

"Compensation and Compliance Matters: Consumer Financial Protection Bureau Sues Sprint Over Charges from a Third-Party"

On Dec. 17, 2014, the Consumer Financial Protection Bureau announced that it was suing Sprint Corp., the major wireless provider,…

"Compensation and Compliance Matters: Whose Email Is It Anyway"

A recent decision by the National Labor Relations Board, drastically changes the rights of employees using company email and requires…

"Compensation and Compliance Matters: Don’t Get Burned by Joint Marketing RESPA Violations"

Co-marketing or joint marketing has become a hot issue under the Real Estate Settlement Procedures Act. In co-marketed materials two…

"Compensation and Compliance Matters: New Lawsuit Creates New Danger for HUD Foreclosures"

A lawsuit alleges that lenders that fail to take required loss mitigation steps prior to foreclosing on Department of Housing…

"Compensation and Compliance Matters: The Emerging Non Qualified Mortgages Problem"

Many lenders touting so-called safe origination practices for loans made outside the legal safe harbor for “qualified mortgages” are relying…

"Compensation and Compliance Matters: CFPB Requires Franklin Loan Corp To Pay Damages"

The Consumer Financial Protection Bureau has entered into a consent order with another lender that had been violating the loan…

"Compensation and Compliance Matters: Is Disparate Impact Out?"

Last week the United States District Court for the District of Columbia invalidated the Department of Housing and Urban Development’s…

"Compensation and Compliance Matters: Cures for Cap Violations"

The Consumer Financial Protection Bureau has adopted a rule that allows lenders to cure violations of the 3% cap on points and…

"Compensation and Compliance Matters: CFPB Enforcement May Just be the Start of Concerns"

A lawsuit recently filed against Castle & Cook illustrates the dangers companies face in the wake of compliance problems. Although most focus…

"Compensation and Compliance Matters: A Closer Look at MSA Exclusivity Concerns"

While exclusivity provisions in marketing services agreements are not per se illegal pursuant to Real Estate Settlement Procedures Act, their inherent anticompetitive…

"Compensation and Compliance Matters: UDAP Risk Surfaces Again, Adds CFPB Insight"

The Consumer Financial Protection Bureau announced a consent decree late last week against M&T Bank. Apparently M&T advertised “no strings…

"Compensation and Compliance Matters: Marketing Services Agreements Are Still A Target"

Anyone doubting that regulators are still focused on marketing services agreements need look no further than the HUD Audit and…

"Offit Kurman Attorney Ari Karen’s Compensation and Compliance Matters"

Each week, labor and employment attorney Ari Karen writes about the latest hearings and litigation in the financial sector, and…

"Compensation and Compliance Matters: Financial Institutions Will Pay If They Fail to Supervise Third Parties"

On Sept. 25, the Consumer Financial Protection Bureau, in conjunction with the Office of the Comptroller of the Currency, issued…

"Compensation and Compliance Matters: More Whistleblower Cases against Lenders Ahead?"

The U.S. Attorney General is pressing congress to change legislation that caps whistleblower awards at 1.6 million dollars under the…

"Compensation and Compliance Matters: Here Come the Redlining Investigations"

Following the City of Providence, the State of New York has filed the first of many promised lawsuits against lenders, accusing mortgage…

"Compensation and Compliance Matters: Why Predictable Compliance Infrastructure Is Key"

I am finding that a fast way to a regulator’s heart is through a predictable and consistent compliance system. To…

"Compensation and Compliance Matters: Auto Case Shows CFPB Will Fine Lenders for Not Protecting Borrowers"

The latest action against an auto lender underscores the CFPB’s expectation that lenders will affirmatively act to protect customers throughout…

"Compensation and Compliance Matters: How Compliance Violations Become Conspiracies"

One thing lenders often overlook is the manner in which potentially isolated compliance problems can in retrospect be weaved into…

"Compensation and Compliance Matters: Looking at Mini-Correspondents Differently"

Often a mistake lenders make in response to Consumer Financial Protection Bureau guidance is to focus too narrowly on the…

"Compensation and Compliance: A Few Things We’ve Learned About the CFPB in the Last Three Years"

On its third anniversary, we can look back on the Consumer Financial Protection Bureau and make certain observations as follows:…

"Compensation and Compliance: Pay Attention to the HMDA Proposals"

The Consumer Financial Protection Bureau announced its proposal for 37 new data requirements in Home Mortgage Disclosure Act information. The…

"Compensation and Compliance Matters: CFPB Complaint Plan Invites Abuses, Assures Higher Cost"

Last week the Consumer Financial Protection Bureau set forth a new proposal to make all complaints public and sort them…

"Compensation and Compliance Matters: Time to Reevaluate the ‘Mini-Correspondent’ Model, ASAP"

On Friday the Consumer Financial Protection Bureau released guidance pertaining to the increasing use of the mini-correspondent relationship. Specifically, the CFPB indicated…

"Compensation and Compliance Matters: Supreme Court NLRB Decision Has Ripple Effects for Lenders"

Last week, the U.S. Supreme Court determined that the Obama administration’s recess appointments of three National Labor Relations Board judges…

"Compensation and Compliance Matters: It’s What Your Loan Officers Say that Matters"

The latest financial institution to get hit with a Consumer Financial Protection Bureau charge of unfair and deceptive practices was GE…

"Compensation and Compliance Matters: The QM Safe Harbor Just Became Less ‘Safe’"

We already knew that the safe harbor for qualified mortgage loans did not protect lenders from common law and statutory…

"Compensation and Compliance Matters: CFPB Disregards Employment Classification to Find Kickbacks"

Last week the Consumer Financial Protection Bureau announced another enforcement action aimed at “kickbacks” prohibited by the Real Estate Settlement…

"Compensation and Compliance Matters: The Most Important Thing About Originating Non-QM Loans"

What’s the most important thing about originating non-QM loans? Getting a third-party opinion. Simply put, it is what lenders always…

"Compensation and Compliance Matters: CFPB Shows No Signs of Forgetting About RESPA"

For those hoping the Consumer Financial Protection Bureau’s focus has turned away from the Real Estate Settlement Procedures Act, last…

"Compensation and Compliance Matters: It’s What You Don’t Hear About the CFPB that Can Hurt You"

In a statement released by the Consumer Financial Protection Bureau last week, the agency announced that it had issued over…

"Compensation and Compliance Matters: A Reminder of the Risks from Lending Through Third Parties"

Last month, BMO Harris Bank changed policies on auto lending to pay a flat percentage of the loan amount to…

"Compensation and Compliance Matters: What Small Mortgage Lenders Can Learn from Credit Card Settlement"

The Consumer Financial Protection Bureau has once again utilized its broadest and most powerful weapon—Unfair and Deceptive Acts and Practices—to…

"Compensation and Compliance Matters: Proposed Fix for QM Helps, but Falls Short of Needed Clarity"

Last week the Consumer Financial Protection Bureau announced that it was considering allowing a cure for mortgages that were closed as…

"Compensation and Compliance Matters: Closing Isn’t Like Cramming for an Exam"

The CFPB last week made news by publicly recognizing that borrowers felt overwhelmed in regard to the closing process. While…

"Compensation and Compliance Matters: Why LO Comp ‘Pick-A-Pay’ gets Picked On (Part One)"

The so-called loan officer compensation pick-a-pay-plan is often at the center of controversy regarding its illegality. I believe the reason for this…

"Compensation and Compliance Matters: Lenders Get a Break on Background Checks"

The rock and hard place between which lenders have found themselves in regard to the use of hiring screens and…

"Compensation and Compliance Matters: How LO-to-LO Referrals Become Problems"

At a glance, it would seem that there should be no problem with one loan officer referring a loan to…

"Compensation and Compliance Matters: The Dangers of a Qualified Mortgage Loan Losing Status"

Many lenders think repurchase or non-saleable, when they think of the possibility of a mistake on a qualified mortgage rule loan that…

"Compensation and Compliance Matters: And the Fraud Claims Keep Coming…"

The United States Department of Justice’s successful attempt to prove fraudulent conduct in connection with alleged shoddy origination practices against Countrywide has…

"Compensation and Compliance Matters: New Minimum Wage, Overtime Orders Could Haunt Lenders"

How will these affect you? Immediately there is no effect on lenders, but down the road it’s possible. The two…

"The Hazards of Bank Manager Reimbursements and 1099 Payments"

Offit Kurman labor and employment attorney Ari Karen writes a weekly blog, “Compensation and Compliance Matters,” on the National Mortgage News website. In one of his…

"Compensation and Compliance Matters- 2.14.14"

WE’RE HEARING in terms of compensation plans, many lenders treat open-ended loans as a non-issue given their exemption from the…

"Compliance Checklist for CFPB Examinations"

As you may remember from one of our previous blogs, “Financial Institution Compliance and Loan Officer Compensation,” the Consumer Financial…

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