FIL-20-2012: FDIC Statement on CFPB Bulletin 2012-02: Payments to Loan Originators Based on Mortgage Transaction Terms or Conditions under Regulation Z

The Consumer Financial Protection Bureau (CFPB) issued Bulletin 2012-02 on April 2, 2012, to provide additional guidance on permissible forms of compensation to loan originators under the Truth in Lending Act - Regulation Z's Compensation Rules (12 C.F.R. § 1026.36). The Bulletin addresses whether and how the Compensation Rules apply to qualified profit-sharing, 401(k), and employee stock ownership plans (collectively, Qualified Plans). Specifically, the CFPB indicates that the Compensation Rules permit employers to contribute to Qualified Plans out of a profit pool derived from mortgage originations. The CFPB does not provide guidance on profit-sharing arrangements or plans that are "not in the nature of Qualified Plans," but indicates it anticipates providing greater clarity in a future rulemaking.

Statement of Applicability to Institutions with Total Assets under $1 Billion: This guidance applies to all FDIC-supervised financial institutions that engage in mortgage loan origination.