CFPB Proposal Draws Line between Tellers and LOs

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Earlier this week the Consumer Financial Protection Bureau issued a proposal revising portions of the final loan officer compensation rules as they pertain to the definition of an originator. The proposal addresses the portion of the originator definition to the extent it concerns whether mere referrals to originators amount to origination itself. The CFPB now proposes to state that a person otherwise performing clerical roles is not an originator if they merely provide contact information to a borrower, as long as they don't discuss credit terms and do not engage in an assessment of the borrower's financial characteristics.

Essentially, this proposal is aimed at narrowly excluding bank tellers from the originator definition. It does not appear to provide any relief to other newly designated originators, such as telemarketers, loan officer assistants, or non-producing managers. Indeed, such persons generally make some level of assessment of the borrowers financial circumstances and certainly discuss the company's credit terms.

For those entities proposing to use this narrow window to avoid the impacts of becoming an originator, it is advisable to script out what a teller says to a customer to avoid crossing any lines that would render the person an originator.