In a proactive effort to ensure we are compliant on Loan Officer compensation I would like some clarification on how we are to record bps compliantly on loans for the LOs we employ, under the following circumstance. If and LO has managed to acquire a loan from a different lender via a client shopping, and the client provides us an LE from the other lender, are their restrictions/rules on the compensation we can give our LOs?

Not sure I am fully grasping the question but the compensation rule would apply the same whether the consumer was issued a LE from another lender.

If you are asking if you can pay differently dependent on where the loan was sourced, this would fall under the analysis to determine if it was a proxy for a term.

I might be able to assist more if you can share what your specific concerns might be.

Hi Kristi,

First of all, welcome to BOL!

I am not quite sure I understand your question - Are you stating that a consumer was shopping different banks, brought in an LE from a different bank and your LO was able to persuade them to submit the application with your bank instead?

If so, I am not sure how that affects the compensation rules. Your institution should already have specific compensation plans in place which dictate LO Comp. If you are matching pricing from another lender, it shouldn't matter. That is a business decision and a pricing exception.

If you are pricing based on interest rates you have a whole other mess to deal with. Hopefully that is not what you are referring to.

Also, for fair lending purposes, I would very carefully document pricing exceptions, if that is what you were referring to.