Scenario: A bank has a Chattel Loan Purchase & Sale Agreement with an indirect lender who originates Mobile Home paper, underwrites the loan, runs the credit report, closes and subsequently funds the loan with their money. After closing, the indirect lender sells the paper to the bank.
Under this Agreement, the borrower pays an "origination fee" of $499 at closing to the indirect lender (because the borrower resides in NY) either as cash or in most instances financed as part of the loan. The indirect lender also receives a dealer reserve "service fee" paid by the bank at time of funding which represents a portion of the finance charge earned over the term of the contract. Any unearned portion upon early payout is returned back to the bank.
Could this arrangement be interpreted as dual source compensation under Dodd-Frank because the indirect lender is receiving payments and/or compensation from both the consumer, in the form of an origination fee, and the bank, in the form of a dealer reserve service fee?