The Mortgage Bankers Association is seeking to overturn a recent Department of Labor interpretation that requires mortgage lenders to pay their loan officers overtime pay.
The 2010 interpretation reverses a 2006 DOL ruling that provided an overtime exemption for LOs that engaged in certain administrative duties.
In a new complaint filed Wednesday, MBA contends DOL acted abruptly and without notice in reversing the 2006 interpretation and violated the Administrative Procedures Act. The case was filed in U.S. District Court in Washington, D.C.
"This abrupt reversal by the department not only opens lenders up to lawsuits for past actions, but also could require them to make costly changes to their internal operations and compensation structure — costs that will ultimately be borne by the consumer," said MBA president and chief executive John Courson.
The MBA lawsuit comes on the heels of a scheduled jury trial in Detroit U.S. District Court that pits Quicken Loans against some its LOs who allege they should receive overtime pay. The trial is slated to start in early February. The judge in the Quicken Loans case also is weighing the validity of the DOL's 2006 and 2010 overtime interpretations.
In its filings with the court, Quicken Loans contends its loan officers analyze their client's financial goals and advise them on the “mortgage options that best suit their individual needs." Due to these administrative duties, they are not entitled to overtime, the firm argues.
The plaintiffs' attorneys claim that Quicken's LOs are primarily engaged in sales of mortgages and they are entitled to overtime under DOL's 2006 and 2010 interpretations. Quicken Loans is based in Livonia, Mich.
