Skip to main content

Sen. Pryor Mirrors NAMB's Concern Over LO Comp Rule in Letter to Bernanke

NationalMortgageProfessional.com
Mar 24, 2011

Sen. Mark Pryor (D-AR) has submitted a letter to Ben S. Bernanke, chairman of the Federal Reserve Board (FRB), seeking the postponement of the Fed’s rules on loan originator (LO) compensation, set to take effect April 1, 2011, Regulation Z; Docket No. R-1366, Truth-in-Lending. In his letter to Bernanke, Sen. Pryor requests and seeks a "proactive education campaign to inform mortgage brokers and lenders of the requirements in the rule."  Sen. Pryor's letter is the latest in a series of written Congressional requests to Bernanke and the Federal Reserve, including a bi-partisan letter co-authored by United States Sens. David Vitter (R-LA) and Jon Tester (D-MT), and a letter dated March 15 where 31 members of the House Financial Services Committee (HFSC), chaired by Rep. Spencer Bachus (R-AL). In both cases, the letters sought an extension of the implementation date for the April 1, 2011 LO compensation rule effective date. Rep. Bachus, co-chair of the HFSC, wrote to Bernanke as well to express his concerns with a March 15, 2011 letter. "As we learned during the previous two years, many aspects of the Board's final rule rsie concerns among consumers and the industries that serve them," said Rep. Bachus in his letter. "Allowing additional time for implementation would help to ensure that the final rule accomplishes the Fed's goals while eliminating potential misunderstanding or confusion for all interested stakeholders."  The position taken by Sen. Pryor in his letter mirrors the view of mortgage industry trade groups, including the National Association of Mortgage Brokers (NAMB) who, along with six other industry groups, submitted a letter seeking similar clarification.  "I urge the Board to commence a proactive education campaign to inform mortgage brokers and lenders of requirements in the rule," said Sen. Pryor in his letter to Bernanke. "Webinars, seminars and conference calls can be effective tools to education loan originators and answer their questions." Sen. Pryor cited an SBA Office of Advocacy letter where the SBA also requested a delay in the April 1st rule enforcement based on the grounds that a compliance manual was never issued by the Federal Reserve. Federal law mandates that a compliance guide is required by the Small Business Regulatory Enforcement Fairness Act (SBREFA).  "Advocacy stated that the compliance guide has insufficient information to enable a small entity to know what requirements of the rule have been met," said Sen. Pryor. "I recommend that the Board postpone the implementation date for this rule for a short time until the industry, the Board and the SBA Office of Advocacy agree that a workable compliance guide is available."
Published
Mar 24, 2011
The Fed: Tapering Could Start In November

Open Market Committee also expects to raise federal funds rate a year earlier, in 2022

Regulation and Compliance
Sep 23, 2021
HUD, FHFA: Freddie Mac Can Buy Group Home-Backed Loans

Agencies issue rule clarification after a mortgage lender refused to lend to an individual renting to a group home

Regulation and Compliance
Sep 23, 2021
Fannie Mae Plans To Restart Credit Risk Transfers In 2021

Paused Since March 2020, New CRT Transactions To Begin In October

Regulation and Compliance
Sep 21, 2021
Biden Nominates McCargo To Lead Ginnie Mae

Currently Serves As Senior Advisor For Housing Finance At HUD

Regulation and Compliance
Sep 14, 2021
OCC Plans To Rescind 2020 CRA Rule

The OCC formally issued a proposal to rescind a controversial rule within the Community Reinvestment Act (CRA) that was published in June 2020.

Regulation and Compliance
Sep 10, 2021
CSBS Changes Servicer Liquidity Policy

CSBS And MBA Encourage States To Adopt Consistently

Regulation and Compliance
Sep 08, 2021