Federal Reserve’s Final Rule on Loan Originator
Compensation is in effect as of April 6, 2011

Do I need a Loan Originator Compensation Policy?

Yes. The Federal Reserve’s Final Rule on loan originator compensation took
effect on April 6, 2011. The rule applies to all mortgage loan originators whether
they work for a mortgage banker, a mortgage broker or a depository lender.

Starting with all mortgage applications received by the creditor on or after April 6,
2011, loan originators can no longer be compensated based on the interest
rate, loan profitability or terms of the loan, with the exception of loan amount.

The rule requires that you have written compensation policies in place to
comply with the Final Rule.

Not only is written compensation plan required under the Federal Reserve’s
Rule but your primary regulator, for example your State Banking Department, will
require it and will likely review it at your next audit, or if an issue should arise.  

How can I Get an LO Compensation Policy?

First National Compliance Solutions has a template that covers your
compensation policies for retail loan originators and third party origination's.
This plan allows you to customize it yourself or we can customize it for you.

What is included in the policy?

The policy is designed to provide a detailed explanation of your loan originator
compensation plan in Microsoft Word that can be edited or updated as needed.

Each LO Compensation Policy goes into detail about:

Allowable forms of compensation
Detailed explanation of the Federal Reserve’s Final Rule
Explanation of the Anti-Steering and Safe Harbor provisions
The Loan Originators responsibility to your company and the borrower
The required disclosure requirements
How, when and the way in which your loan originator will be compensated

How do I get started?

To request more information or to order a policy call: 1 800 400 4134 or fill out
the form below:
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