New federal regulations that are supposed to clarify the overtime pay status of loan officers and reduce employee lawsuits went into effect Aug. 23.The Labor Department rule does not specifically exempt loan officers from overtime pay. However, the rule exempts most financial services employees from receiving overtime pay who are paid commissions and exercise "discretion and independent judgment" in performing their duties. The Mortgage Bankers Association, the National Association of Mortgage Brokers, the American Bankers Association, and other financial services groups support the first update of the overtime standards in 50 years. However, AFL-CIO members were scheduled to stage protests in several cities Monday, contending that the new regs will take overtime pay away from 6 million workers. Democratic presidential nominee John Kerry has pledged to repeal the overtime regulations if he is elected president. So far, legislative efforts to block implementation of the new regulations have failed. But litigation is still possible. "There is still a chance of a court challenge at some point, but I don't see anything on the horizon," said Erick Gustafson, the MBA's senior director of government affairs.
