recommended that the CFPB make three changes to the rule: Permit voluntary reductions by Loan Officers to their compensation in response to competition, allow reductions to compensation when the originator makes an error, and allow variable compensation for loans made under housing finance agency programs. The MBA members also called on the CPFB to clarify the rule prohibiting compensation based on loan terms or proxies for terms.
"The LO Comp rule causes serious problems for industry and consumers due to its inflexible prohibitions on adjusting compensation and its amorphous definition for what constitutes a proxy for a loan's term or conditions," the letter said. "The rule harms the efficiency of the mortgage loan market by limiting lenders' ability to compete and consumers' ability to shop."
The MBA letter
is the latest request for the CFPB to adjust its policies. Yesterday, a coalition of 33 state attorneys general called on Mulvaney’s agency to continue protecting military service members against predatory lenders under the Military Lending Act (MLA).
“We believe that such a move would significantly harm the servicemembers who live and work in our states and that it would be contrary to the CFPB’s statutory mandate,” the attorneys general wrote. “Protection of our nation’s servicemembers against financial exploitation is a bedrock tenet of federal consumer financial protection law, and it traditionally has been a bipartisan effort.”