Legal Blog

Financial Institution Compliance and Loan Officer Compensation

Loan Officer CompensationLast week, we discussed how the Consumer Financial Protection Bureau (CFPB) had released its State Coordinated Coordination Framework, outlining how the Bureau will extend its regulatory reach throughout each state. As we mentioned, this would have ramifications for businesses of all shapes and sizes. No longer would small businesses be able to fly under the radar. If that article didn’t get the attention of non-depository lenders and community banks, this one will… The CFPB recently initiated its first loan officer compensation action. The CFPB is seeking civil monetary penalties, restitution and legal costs against a midsized non-depository, its president, and vice president for paying loan officers quarterly bonuses. This small bank, with fewer than 350 employees nationwide that originated a little over $1 billion in loans last year, was not “too small” for the CFPB to target for failing to document loan officer compensations in its written employee agreements. According to the complaint, the bonuses were correlated to the terms of the loans generated over the prior quarter. This complaint by the CFPB is likely only the first of many. Do your written employee agreements cover everything they should? It is better to review these documents now than after hearing from the CFPB. If you have questions about Financial Institution Compliance and Loan Officer Compensation, or your institution’s current compliance management system, please contact Offit Kurman labor and employment attorney Ari Karen at akaren@offitkurman.com. Mr. 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. Offit Kurman Attorneys at Law: Financial Institutions Compliance Practice Group At Offit Kurman Attorneys At Law, the attorneys in our Financial Institutions Compliance Practice Group offer legal representation and counseling for commercial and corporate transactions, regulatory compliance, government enforcement, public policy and governmental affairs and litigation and arbitration. In addition, we continuously monitor legal developments, publish articles, participate in industry and bar association groups on consumer finance issues, and participate in various national and local organizations involved in the consumer financial services industry. If you would like to learn more about Offit Kurman’s Financial Institutions Compliance Practice Group to see what we can do for you, please fill out our contact form to access the knowledgeable legal guidance that our experienced team of attorneys has to offer. You can also connect with Offit Kurman via FacebookTwitterGoogle+YouTube, and LinkedIn. Sources: And So the LO Comp Allegations Begin… National Mortgage News