The National Reverse Mortgage Lenders Association sent a letter Tuesday requesting that the Federal Reserve Board, led by Chairman Ben Bernanke, delay the implementation date of the Fed’s loan officer compensation rule. The rule is scheduled to take effect on April 1.
The letter, from NRMLA President Peter Bell on behalf of the association, comes following two law suits aiming to delay implementation of the rule, as well as a letter from the House Finance Committee, asking the same.
“The reasons for our request are that many NRMLA members are small businesses, and the lack of clarity with respect to the implementation and manner in which the Rules apply to loan originator compensation are not clear from the Rule itself, and have been further confused by recent informal interpretations of the Rules by staff from the Federal Reserve,” the letter stated.
NRMLA devoted a session Tuesday at its industry conference in Newport Beach, Calif., to understanding the loan officer compensation rule. There are still uncertainties as to how to interpret specific points in the rule, according to the association’s legal counsel, Jim Milano.
“The rules are unclear in many respects, ambiguous, and in some areas apparently internally inconsistent,” the letter said. “Further, the rules have generated considerable uncertainty, particularly in the area of the types of compensation that are, or are not, prohibited, and the failure to comply could bring exposure to administrative action and litigation.”
Last week, the National Association of Independent Housing Professionals and National Association of Mortgage Bankers filed suit against the fed.
On Tuesday, NRMLA advised conference attendees to prepare for the April 1 implementation. “Preliminary arguments may not be heard until week of march 28th,” Milano told conference attendees on Tuesday regarding the law suits. “Everyone is proceeding as if the rule will go into effect [on time].”
Written by Elizabeth Ecker
