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#1998386 - 02/26/15 04:59 PM Teller/CSR Loan Originator?
leo_bsayer Offline
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Joined: Aug 2006
Posts: 645
Our mortgage department is wanting to provide a packet of information to our customer service representatives/tellers that assists them in directing customers to our mortgage department. The packet consists of a worksheet or checklist of things needed to apply for a mortgage loan, such as W-2's, pay stubs, bank statements, etc..., and a mortgage application. It also will contain a business card of one MLO in our mortgage department that will follow up with these requests. This packet of information will be provided to the customer.

The employee will also have a sheet to take the customer's constact information to forward to the mortgage department. There is no referral fee being given to the teller or CSR.

Does the act of providing the mortgage application and/or referring the customer to an MLO make the teller/CSR a loan originator per Regulation Z? What if no application were provided, just the checklist of needed items and a business card for the MLO? Also, what if we included the mortgage application, but simply referred them to our mortgage department?

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#1998397 - 02/26/15 05:24 PM Re: Teller/CSR Loan Originator? leo_bsayer
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,962
Bloomington, IN
The "non-compensated" referral would not make the teller/CSR a loan originator under Reg. Z.

However, keep in mind that if the number of referrals are considered (directly or indirectly) in any compensation calculation then they become paid referrals and the teller/CSR is now a loan originator under 1026.36(a)(1) and its Commentary.

I personally think this interpretation is asinine but that is what the Commentary states and it is also the opinion of the FDIC.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#1998412 - 02/26/15 05:45 PM Re: Teller/CSR Loan Originator? leo_bsayer
leo_bsayer Offline
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Joined: Aug 2006
Posts: 645
Thanks Dan. Would the fact that the employee is paid at all, as in a regular payroll, be considered indirect compensation - especially if it is a requirement for the employee to provide these packets?

Also, providing the application at all wouldn't make them an LO under Reg Z?

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#1998416 - 02/26/15 05:55 PM Re: Teller/CSR Loan Originator? leo_bsayer
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,962
Bloomington, IN
I would advise you to review 1026.36(a)(1) and its Commentary and the "actions" that would make the person a loan originator and the ones that would not. Then it would probably be in your best interest to discuss the situation with your regulator.

Now with that said - especially if it is a requirement for the employee to provide these packets?

If that is part of their job duties then an argument could be made they are being paid for these referrals through their salary. If that argument was raised (regardless how weak it may be) by an examiner then you would have to rebuke it.


Also, providing the application at all wouldn't make them an LO under Reg Z?

If a customer asks for an application and the teller/CSR simply provides ones to them then IMO that would not make them a loan originator.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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