The FDIC has issued a statement in follow-up to a bulletin by the Consumer Financial Protection Bureau (“CFPB”) regarding the compensation of mortgage loan originators (“MLOs”) under Regulation Z, 12 C.F.R. § 226.36 (the “Rule”). As discussed earlier this month, the CFPB recently clarified that MLOs may participate in an employer’s qualified profit sharing, 401(k), and employee stock ownership plans (“Qualified Plans”) even if contributions are taken from a profit pool derived from mortgage originations subject to the Rule.
The CFPB’s bulletin did not provide guidance regarding other compensation plans, but promised further clarification in a future rulemaking. For examination purposes, the FDIC will expect compensation plans to be consistent with the Rule, CFPB guidance, and Rule commentary. The Rule is intended to protect consumers from unfair or abusive lending practices, while preserving responsible lending and sustained homeownership. Pending further guidance from the CFPB, the FDIC will review compensation programs on a fact-specific basis in light of an institution’s compliance efforts and particular circumstances.