Credit Unions: CFPB broker comp rules create new burdens
"Unfortunately, although well-intended, this rule will potentially increase the cost of compliance and add to the ever-increasing regulatory burden on credit unions," said NAFCU President and CEO Fred Becker.
Becker and NAFCU outlined the following concerns:
The rule, which implements Dodd-Frank Act requirements, imposes a number of limits regarding mortgage loan originator compensation that would create additional regulatory burden on credit unions.
Among other things, the rule:
- prohibits compensation that varies with the loan terms – a broker or loan officer cannot get paid more if the consumer takes a loan with a higher interest rate, a prepayment penalty, or higher fees.
- prohibit loan originators from being paid by both the consumer and another person such as the creditor; and
- replaces the current state-by-state qualification requirements for loan originators with a new federal standard.