The CFPB filed a complaint in the United States District Court for the District of Utah against a mortgage company and two of its principals, alleging that the mortgage company gave bonuses to loan originators who steered consumers into mortgages with higher interest rates in violation of the Consumer Financial Protection Act and the Federal Reserve Board’s 2010 compensation rule, which prohibits any person from compensating a loan originator based on a term or condition of a mortgage loan. In particular, the CFPB alleged that in an attempt to circumvent the 2010 compensation rule issued by the FRB, the mortgage company paid quarterly bonuses to loan officers in amounts that varied based on the interest rates of the loan. The CFPB further alleged that the mortgage company did not refer to the quarterly bonus program in its written compensation agreement with its loan officers, nor did the mortgage company refer to the quarterly bonus plan in any written policies—in violation of the CFPA and the record retention requirements of Regulation Z.
© 2014 Goodwin Procter LLP. All rights reserved. This informational piece, which may be considered advertising under the ethical rules of certain jurisdictions, is provided with the understanding that it does not constitute the rendering of legal advice or other professional advice by Goodwin Procter LLP, Goodwin Procter (UK) LLP or their attorneys. Prior results do not guarantee similar outcome.
Goodwin Procter LLP is a limited liability partnership which operates in the United States and has a principal law office located at 53 State Street, Boston, MA 02109. Goodwin Procter (UK) LLP is a separate limited liability partnership registered in England and Wales with registered number OC362294. Its registered office is at Tower 42, 25 Old Broad Street, London EC2N 1HQ. A list of the names of the members of Goodwin Procter (UK) LLP is available for inspection at the registered office. Goodwin Procter (UK) LLP is authorized and regulated by the Solicitors Regulation Authority.