Client Alert: The Federal Reserve Board's Final Rule on Loan Originator Compensation and Steering
The Federal Reserve Board's Final Rule on Loan Originator Compensation and Steering ("Final Rule), promulgated under its Truth in Lending (Reg Z) regulatory authority, was initially effective on April 1, 2011. The Final Rule was immediately challenged in court by the National Association of Mortgage Brokers and the National Association of Independent Housing Professionals, and on March 30, 2011, the Associations were successful in obtaining an emergency administrative stay of the Final Rule. However, only days later, the Circuit Court of Appeals dissolved the stay, and on April 5, 2011, the Final Rule became effective immediately. Although the Associations have stated their intention to continue their litigation, financial institutions now must revise their compensation and commission programs to ensure compliance with the Final Rule.
The Compensation and Employment practice of Barack Ferrazzano has prepared the following Client Action Alert to provide an overview of the Final Rule and how it impacts compensation practices for mortgage originators.
Please click below to read the Alert. Any member of our Compensation and Employment practice is available to answer any questions about the Final Rule.