Chairman of the House Financial Services Committee, Spencer Bachus (R-Ala.), sent a letter to the Federal Reserve on Tuesday, urging the agency to delay its loan originator compensation rule, which is scheduled to go into effect April 1, 2011.
“There have been complaints among numerous stakeholders that the final regulation is intentionally vague, that the Board has refused to provide formal guidance, and that different members of the Board staff have offered differing interpretation of its meaning,” said Chairman Bachus.
In the letter, which was also signed by 31 other members of the House, the Chairman said that allowing additional time for implementation would help to ensure that the final rule accomplishes the Fed’s goals while eliminating potential misunderstanding or confusion for all interested stakeholders.
“We recommend that the Board delay implementation of the final rule and provide written guidance to facilitate compliance by affected entities,” said Bachus.
Mortgage trade groups have requested that the Fed delay the rule, but as of yet, the Fed hasn’t lead anyone to believe it will push back the implementation date.
Both the National Association of Mortgage Brokers and the National Association of Independent Housing Professionals have filed suit against the Fed, saying the rule could cause devastating and irreparable harm to small business mortgage brokers.
The National Reverse Mortgage Lenders Association also requested guidance from the Fed on how the rule will impact reverse mortgages. Specifically, NRMLA sent a letter asking the Fed to define the “amount of credit extended” on reverse mortgages and suggests it should be the maximum claim amount, rather than initial principal limit. NRMLA told its NRMLA West conference attendees on Tuesday in California that it has yet to receive a response from the Fed regarding its letter.
