I am doing a review of the Loan Officer Compensation plans we have, and in one of our plans we have bonuses designated for Non-Producing Divisional Managers in which the plan pays a fixed percentage of net income for all branches under their purview less a set minimum administrative fee.

Now, since the bank is considered a Loan Originator for purposes of the CFPB LO Comp Rule, is it acceptable to pay this Non-Producing Divisional Manager a bonus based on branch profitability when that profitability includes loan points and fees from mortgage loans?

What raises this question is a section in the LO Comp Small Entity Guide that states:

If you are a loan originator for purposes of the compensation provisions (including a table-funded creditor), you generally may not receive compensation that is based on:
Quote:
A term of a single transaction.
The terms of multiple transactions conducted by you.
The terms of multiple transactions conducted by multiple loan originators, taken in the aggregate (such as most profits-based compensation plans).
The rule also prohibits anyone for purposes of the compensation provisions from paying loan originators compensation that is based on transaction terms. This means creditors, loan originators, or anyone else may not pay their own loan originator employees or other loan originators (such as brokers) compensation based on the term of a transaction or multiple transactions.


So, even though this individual is not a Loan Originator themselves, does this section of the rule apply to that position since the Bank is considered a Loan Originator organization, or no?
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Giddy up.