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BankersOnline.com Forums Dodd-Frank Final Rules Discussions Loan Originator Compensation Rule Referrals from Tellers
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#1838787 - 08/02/13 01:29 PM Re: Referrals from Tellers Random
RR Joker Offline
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Spreadsheet? wink
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Loan Originator Compensation Rule
#1839767 - 08/06/13 03:34 PM Re: Referrals from Tellers Random
SaaL Offline
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So can we back up a little on this whole teller referral fee concept?

So assuming that the current proposal is finalized....a teller will be able to make a general referral even if the customer does not request information about a mortgage loan and as long as the teller doesn't quote specific rates, etc. or steer based on an assessment of financial characteristics, then they are not considered an LO. This would be true even though they receive compensation in the form of a salary - or to my way of thinking - even if they do receive a referral fee. I'm not following that payment of a referral fee automatically makes the teller an LO. If they are not performing LO activities then they're not an LO - period - regardless of compensation. Right??? What am I missing??
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#1854465 - 09/23/13 01:45 PM Re: Referrals from Tellers Random
leo_bsayer Offline
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Now that the rules have been finalized, I think that Saal's assumptions are correct. Anyone else agree?

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#1855111 - 09/24/13 08:22 PM Re: Referrals from Tellers leo_bsayer
Tesla Offline
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I agree with Saal too.
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#1858509 - 10/04/13 02:30 PM Re: Referrals from Tellers Random
LuckySoFar Offline
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Carolina in my mind
"Referring includes any oral or written action directed to a consumer that can affirmatively influence the consumer to select a particular loan originator or creditor to obtain an extension of credit when the consumer will pay for such credit."

It's the 'particular loan originator' that has our bank thinking most employees would be Loan Originators. The majority of our referrals are made to a specific LO for geographic reasons; a teller is obviously going to refer a customer to an LO within the branch, or to a residential mortgage lender assigned to cover a group of branches or region. If a customer is directed to a specific LO, whether or not any financial characteristics are discussed (there can often be a fine line there too), would this practice make the referring employee an LO under Reg Z or am I missing something?
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#1858680 - 10/04/13 05:20 PM Re: Referrals from Tellers Random
hgliii Offline
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IMO, if your customer walks into the bank and asks a teller "Can you help me find a MLO". The teller responds "Yes, John is our MLO and his office is right behind you" or "Yes, let me introduce you to John our MLO". I don't think the teller is a LO. If on the other hand the customer walks in and the teller initiates the conversation about a mortgage loan i.e. "I understand you may be buying a house let me introduce you to one of MLOs and they can get you financing on that house at our xx% rate" Your teller may be classified as a LO. If your tellers are directed to only point the customer to a Mortgage Loan Originator, there should be no reason to classify them as loan originators.

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#1871794 - 11/15/13 08:11 PM Re: Referrals from Tellers Random
Norman Paperman Offline
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Just to clarify and reiterate what has been said here...

Tell me if I'm wrong. The below revision allows me to pay a teller for a mortgage loan referral (without them being qualified as a loan originator) as long as they don't ask credit qualifying questions during the referral.


The Bureau is revising comment 36(a)-4 to clarify that the loan originator definition,
nevertheless, does not include persons who (whether or not for or in the expectation of
compensation or gain): (1) provide general explanations, information, or descriptions in response
to consumer queries, such as explaining terminology or lending policies; (2) as employees of a
creditor or loan originator, provide loan originator or creditor contact information in response to
the consumer’s request, provided that the employee does not discuss particular transaction terms
and does not refer the consumer, based on the employee’s assessment of the consumer’s
financial characteristics, to a particular loan originator or creditor seeking to originate particular
transactions to consumers with those financial characteristics; (3) describe product-related
services; or (4) explain or describe the steps that a consumer would need to take to obtain a credit
offer, including providing general clarification on qualifications or criteria that would need to be
met that is not specific to that consumer’s circumstances.


Source: http://files.consumerfinance.gov/f/201301_cfpb_final-rule_loan-originator-compensation.pdf
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#1871928 - 11/15/13 11:40 PM Re: Referrals from Tellers Random
ahou Offline
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If they refer a customer to a particular creditor or LO based on financial characteristics of that customer, regardless of where or how they became aware of those characteristics, that makes them a LO.
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#1872354 - 11/19/13 02:14 PM Re: Referrals from Tellers Norman Paperman
Indy Banker Offline
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Joined: Aug 2010
Posts: 528
Originally Posted By: Norman Paperman
Just to clarify and reiterate what has been said here...

Tell me if I'm wrong. The below revision allows me to pay a teller for a mortgage loan referral (without them being qualified as a loan originator) as long as they don't ask credit qualifying questions during the referral.


The Bureau is revising comment 36(a)-4 to clarify that the loan originator definition,
nevertheless, does not include persons who (whether or not for or in the expectation of
compensation or gain): (1) provide general explanations, information, or descriptions in response
to consumer queries, such as explaining terminology or lending policies; (2) as employees of a
creditor or loan originator, provide loan originator or creditor contact information in response to
the consumer’s request, provided that the employee does not discuss particular transaction terms
and does not refer the consumer, based on the employee’s assessment of the consumer’s
financial characteristics, to a particular loan originator or creditor seeking to originate particular
transactions to consumers with those financial characteristics; (3) describe product-related
services; or (4) explain or describe the steps that a consumer would need to take to obtain a credit
offer, including providing general clarification on qualifications or criteria that would need to be
met that is not specific to that consumer’s circumstances.


Source: http://files.consumerfinance.gov/f/201301_cfpb_final-rule_loan-originator-compensation.pdf


You did not link the most recent final clarification from the CFPB, dated September 12, 2013. They loosened up (just a bit!) on teller referrals and removed "in response to the consumer's request" from the original rule.

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#1872417 - 11/19/13 03:47 PM Re: Referrals from Tellers Random
Norman Paperman Offline
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Thanks bike4life.
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#1873765 - 11/22/13 07:17 PM Re: Referrals from Tellers Random
mdog76 Offline
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Joined: Jan 2007
Posts: 645
I have confirmed that we have some branches where tellers/CSRs will provide customers with loan apps to get processes started if the loan officer is out of the branch, at lunch, etc. Does providing the app make that person a loan originator? No terms, rates, anything is discussed. I think I know, looking for confirmation.

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#1874053 - 11/25/13 04:09 PM Re: Referrals from Tellers Random
Norman Paperman Offline
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From my understanding, no. As long as they are not asking qualifying questions (inquiring about terms/credit/etc) and they are not explaining the terms of the offered loan.
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#2219820 - 08/16/19 02:31 PM Re: Referrals from Tellers Random
J-Comply Offline
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I would like to follow up on this post with a specific situation I've encountered. Our institution, like most, offers in-house portfolio mortgages and separately maintains a secondary market department. Our Secondary Market Policy indicates a referral fee is to be paid to employees that refer a loan to secondary market when it results in an origination. No referral fee is paid for any in-house portfolio mortgages closed. While I view this as an LO compensation issue, management does not, as it is perceived employees receiving the referral fee are not considered loan originators. Can you help clarify whether the act of referring makes non-loan originator employees, loan originators for purposes of TILA compensation rules? Thanks in advance.

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#2219876 - 08/16/19 07:26 PM Re: Referrals from Tellers Random
Mountaineers_Fan Offline
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Posts: 100
My understanding is as long as they're simply referring it's fine. They should just be picking up on clues and referring it to the loan officer.

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