The Mortgage Bankers Association (MBA) has requested written guidance from the Federal Reserve Board (FRB) to help the industry implement the FRB's final rule on loan originator compensation and steering, which was published in September.
In a letter Thursday, MBA President and CEO John Courson asked for written guidance confirming previous direction that the FRB staff has provided MBA and its members either verbally or in person. The MBA is seeking written guidance because of what it says is significant liability that lenders would face under the Truth in Lending Act (TILA) for noncompliance with the rule.
‘If guidance is not forthcoming, many lenders may be forced to be very conservative and implement compensation and loan-pricing structures that provide for fixed compensation for originators at a level that can only be supported by higher loan prices to consumers,’ Courson wrote.
SOURCE: Mortgage Bankers Association