Smoking Gun - Loan Originator Compensation

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On April 6, 2011, the TILA loan originator compensation rule (Rule) went into effect, despite the best efforts of numerous industry organizations, a federal agency, congressional legislators, and private citizens to prevent such implementation. Although the NAIHP has withdrawn its appeals case in order to pursue other options, the NAMB continues its legal challenge in the US Court of Appeals - DC.

A week before the April 1, 2011 statutorily effective date a letter was written to FRB Chairman Bernanke, requesting significant revisions to the Rule - revisions that strike at critical issues contained in the NAIHP and NAMB's objections.

On March 24, 2011, Barnie Frank (D-MA), the House's counterpart to the Senate's Christopher Dodd (D-CT) - now former Senator Dodd - wrote a letter to Chairman Bernanke requesting revisions to the FRB's implementation of the Rule.

Why Frank sent this letter to the FRB eight months after the enactment of his eponymously named legislation known as the Dodd-Frank Act (DFA) - otherwise known as the Wall Street Reform and Consumer Protection Act - after the commencement of litigation, after most of the mortgage industry leadership had spoken with many elected officials in congress to prevent implementation, after the SBA Office of Advocacy had requested a delay, after key organizations had lobbied all along against the Rule, and just days before the effective compliance date - why, that is, Mr. Frank decided to send this letter at the last minute, as it were, is anybody's guess.

Perhaps we can venture a guess or surmise some possible motives.

But, let's review the letter.

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Article outlines the aforementioned letter from Frank to Bernanke, offers commentary, and provides a link to relevant resources.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Jonathan Foxx, Lenders Compliance Group | Attorney Advertising

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