The Consumer Financial Protection Bureau plans on taking a close look at the Federal Reserve's controversial loan officer compensation rule and will issue a new proposal "soon" according to a top official at the young agency.
CFPB acting assistant director Peter Carroll told a Women in Housing and Finance symposium Tuesday that the agency is particularly interested in transactions where the consumer pays discount points and "how that affects creditor-paid transactions,” he said.
Finalized in the summer of 2010, the Fed rule prohibits dual compensation and restricts LOs at mortgage brokerage firms from being compensated by the consumer and the wholesale lender in the same transaction. The rule also bans LOs from making less money on a deal and passing that savings onto the borrower.
The Dodd-Frank Act transferred the Fed's jurisdiction for the LO compensation rule to the new consumer bureau in July 2011.
"We are re-visiting some of the issues around that rulemaking as well as other items that were given to us in the Dodd-Frank Act," Carroll said. "We are working on it now and hopefully will have a proposed rule soon,” he said.
Carroll heads CFPB's 'Office of Mortgage Markets' which monitors the residential finance industry. His group is responsible for how rules impact both consumers and lenders.
