Legal Blog

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 that it would treat mini-correspondents as brokers for purposes of all laws and regulations where in substance the purchaser of the loan functions as the lender. In other words, for purposes of compensation and its impact on qualified mortgage status, the CFPB is in effect notifying mini-correspondents and their investors that the agency reserves the right to retroactively designate mini-correspondents as brokers. This could also affect the treatment of such entities under the Real Estate Settlement Procedures Act.

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If you have any questions about please contact Ari Karen at:

Bank Manager Reimbursementsakaren@offitkurman.com  | 240.507.1740

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.

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