The American Bankers Association and six other industry trade groups are urging a U.S. district court in Detroit to reject a recent Department of Labor interpretative ruling that certain loan officers are entitled to overtime pay.
The trades contend DOL acted suddenly and without notice in March when it reversed its 2004 ruling that the duties performed by mortgage loan officers are administrative and are not entitled to overtime pay under the Fair Labor Standards Act.
The U.S. district court is considering whether loan officers employed by Quicken Loans, Livonia, Mich., are primarily engaged in sales activities and entitled to overtime pay. The plaintiffs are relying on DOL's new overtime interpretation.
"This flip-flopping of positions" by the department does not deserve the court's deference, the trades say in an amicus brief filed in Ryan Henry v. Quicken Loans.
The new interpretation "marked a sudden and dramatic shift in the Department of Labor's position that is inconsistent with the regulations that it seeks to interpret," according to the joint amicus brief.
The Mortgage Bankers Association, American Financial Services Association, Consumer Mortgage Coalition, Housing Policy Council, Independent Community Bankers Association, Community Mortgage Banking Project and ABA signed the amicus brief.
If the district court rules against Quicken Loans, mortgage lenders would face "substantial unintended overtime liability," the signers argue.
