Community Bankers Association of Illinois

CFPB Clarifies Compensation Rules for Loan Originators
April 3, 2012

The Consumer Financial Protection Bureau (CFPB) has received questions from community bankers and the ICBA about whether financial institutions can contribute to Qualified Plans for employees, including loan originators, if employer contributions are derived from profits generated by mortgage loan originators. Questions arose after initial reports that federal regulators were interpreting the new Reg Z amendments as prohibiting the use of any mortgage interest related income (or profit) for mortgage loan originator compensation of any kind. While the CFPB expects to issue a proposed rule for public comment on loan originator provisions in the Dodd-Frank in the near future, the Bureau issued the following clarifying Bulletin on April 2, 2012, which states in-part the following.

"To provide clarity at this juncture, the Bureau's view is that the Compensation Rules permit employers to contribute to Qualified Plans out of a profit pool derived from loan originations."

Read CFPB Bulletin

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