LO Compensation Rule Issues
In This Section
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The LO Comp Rule should be amended to allow for variations in compensation that benefit both consumers and lenders.
Overview: The Loan Originator Compensation Rule (LO Comp Rule) was adopted with the goal of eliminating steering and prohibits compensation based on loan terms, other than loan amount, and proxies for loan terms. MBA, 12 other real estate finance trade associations, and over 200 member companies have urged the Bureau to make limited adjustments to the restrictions on compensation that benefit consumers. These requests include: 1) allowing LOs to voluntarily lower their compensation in response to competition; 2) allowing lenders to reduce an LO's compensation when the LO makes an error; and 3) allowing lenders to alter loan compensation for loans made under state and local housing finance agency (HFA) programs.
Recent MBA Activity Related to LO Compensation Rule Issues
- Letter: MBA and 226 Mortgage Executives to CFPB on Loan Originator Compensation Rule (October 22, 2018)
- Joint Trades Letter: MBA to CFPB on Loan Originator Comepnsation Rule (September 26, 2018)
- Comment Letter: MBA to CFPB on Request for Information Regarding Adopted Regulations and Rulemaking Authorities (June 19, 2018)