What CFPB Crackdown on Utah Lender Means for Loan Officer Compensation

July 30, 2013
American Banker  
consumer financial protection bureau news

The Consumer Financial Protection Bureau (CFPB) has filed a federal complaint against Salt Lake City-based mortgage bank Castle & Cooke Mortgage for allegedly paying quarterly bonuses to loan originators who directed borrowers into higher-cost loans but lacked a written policy describing the bonuses, as required by new loan compensation rules. The CFPB enforces Regulation Z, which dictates that loan officers cannot receive more compensation if a consumer takes out a loan with a higher interest rate, a prepayment penalty, or higher fees. "The CFPB is clearly sending a message that they are going to actively investigate loan officer compensation plans," says Weiner Brodsky Kider Chairman Mitch Kider.
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