Skip to main content

Letter From Barney Frank to Fed Found Supporting Broker's Position on LO Comp

NationalMortgageProfessional.com
Apr 20, 2011

The National Association of Mortgage Brokers (NAMB) has discovered a letter written on March 24, 2011 from Rep. Barney Frank, Ranking Member of the House Financial Services Committee to Ben S. Bernanke, Chairman of the Federal Reserve Board (FRB). In the letter, Rep. Frank requests immediate action on two items he took issue with regarding the FRB's change to Regulation Z; Docket No. R-1366, Truth-in-Lending on steering and loan originator compensation. Rep. Frank's first objection is about the Fed's LO compensation rule appearing to prohibit mortgage brokers, who is receiving borrower-paid compensation from paying their employee loan officers. Rep, Frank's second objection would allow mortgage brokers to make last-minute fee reductions to accommodate for additional settlement costs. "We thank Congressman Frank very much for writing this letter on behalf of the mortgage broker," said Mike Anderson, CRMS of Essential Mortgage, Government Affairs Committee Chair of NAMB. "We are going to be using this letter from Rep. Frank." NAMB filed a lawsuit on March 9, 2011 against the Board of Governors of the FRB seeking temporary and preliminary restraints to delay the April 1, 2011 implementation of the LO compensation rule. NAMB’s suit argued that the FRB’s LO compensation rule, as drafted, will "cause devastating and irreparable harm to small business mortgage brokers, their loan officers and their entire staff as of its April 1, 2011 implementation date." Also filing a suit against the FRB regarding the LO compensation rule was the National Association of Independent Housing Professionals (NAIHP).  NAMB and NAIHP requested a temporary restraining order (TRO) against the rule which was denied by Judge Beryl Howell in U.S. District Court for the District of Columbia. However, a stay of the rule was granted on March 31st, however the stay was lifted just six days later on April 6th as the United States Court of Appeals for the District of Columbia and Appellate Judges Karen LeCraft Henderson, David Tatel and Brett M. Kavanaugh lifted the stay and the LO compensation rule took effect the morning of April 7, 2011.  On April 18th, NAIHP withdrew their suit against the FRB with prejudice, which means they can come back at anytime. NAMB continues to work behind the scenes in building a case against the FRB in hopes of receiving an expedited hearing in May before the Appellate Court, however, Appellate Judges LeCraft Henderson, Tatel and Kavanaugh are going on vacation and a hearing would likely not take place until mid- to late-summer. 
Published
Apr 20, 2011
'A Long Road To Normal'

Nominated again to lead The Fed, Powell tells Senate committee to expect three rate hikes, but 'if we have to raise interest rates more over time, we will.'

Regulation and Compliance
Jan 11, 2022
CFPB: Complaint Response Worsens At Big 3 Credit Bureaus

Report claims Equifax, Experian, and TransUnion routinely failed to fully respond to consumers with errors.

Regulation and Compliance
Jan 10, 2022
The Fed Names Chairs, Deputy Chairs For 12 Reserve Banks

In recent years, the Federal Reserve System has worked to increase the overall diversity of the Reserve Bank and branch boards of directors and continues to build on those efforts.

Regulation and Compliance
Jan 06, 2022
The Fed: Rate Hike Likely Coming in June

Federal Open Market Committee's December minutes reveal discussion of first hike in federal funds rate in 2Q of 2022, as well as of ending asset purchases by March.

Regulation and Compliance
Jan 05, 2022
AARMR No Protection For Savanah Scares

Conference provides opportunity for regulators to interact, discuss common topics

Regulation and Compliance
Jan 04, 2022
McCargo Sworn In As Ginnie Mae President

Former HUD official becomes the first female to lead the Government National Mortgage Association.

Regulation and Compliance
Jan 04, 2022