Legal Blog

Compensation and Compliance Matters- 2.27.14

Open-Ended LoansMany lenders still have relationships with branch managers where, in addition to normal W-2 compensation, they pay managers money via 1099s for various expenses. This is particularly true where the manager owns the building or equipment in question. Of course, there are also scenarios where managers perform outside tasks for the branch, such as marketing, etc., and receive 1099 compensation related thereto. Lenders should be aware that 1099 payments have become a focus for auditors due to the concern that they could be a vehicle for the payment of compensation that is no longer permissible under Dodd-Frank. Indeed, both federal and state regulators are paying close attention to such payments attempting to ascertain their legitimacy and basis. Click here to read the entire blog by Ari Karen on National Mortgage News