The Lenders` Compensation Rule sets out seven eligible compensation methods for the payment of wages, commissions and other indemnities. These „approved“ methods of compensation are essentially safe havens under the rule: your credit union may also have to comply with aspects of the rule regarding additional requirements for your lender employees, which only need to be registered with NMLSR under the SAFE Act and do not need to be licensed.28 The rule outlines expectations to ensure that individual lenders who do not need to be allowed to under the SAFE Act; they are qualified. Trustworthy and properly trained. 1 12 U.S.C. 5101-5116.2 12 CFR Part 1007.3 12 CFR Part 1008.4 74 FR 43232 (26. See for example. B 15 U.S.C 1639b.6 75 FR 58509 (September 24, 2010).7 See General 12 CFR § 226.36 (d).8 76 FR 79768 (22). 9 12 CFR § 1026.36 (b).10 12 CFR § 1026.36 (a) (1) (ii).11 12 CFR § 1026.36 (a) (1), comments 36 (a) -1, 36 (a)-4 and 36 (a) (1) (i) (B) -1.12 12 CFR Part 1026, Supplement I, commentary 36 (a) -1.ii.13 Renegotiation or modification of an existing mortgage does not constitute a loan. The rules for determining whether a loan is an amendment or refinancing, 14 See 12 CFR § 1026.36 (a) (i) (E).15 See section 3.II of the CfPB Small Entity Compliance Guide for a more detailed discussion of exclusions.16 An employee of a credit union who submits a loan application for the member is not a lender.
In addition, an employee of the credit union who sends you a member`s credit application is not a lender until the employee has helped the consumer complete the application, process or analyze information, or discuss credit terms that are available or likely to be available due to the member`s financial characteristics. 12 CFR § 1026.36 (a) (1) (i) (A), Commentary 36 (a)-4.17 12 CFR § 1026.36 (a) (1) (1) (C).18 12 CFR § 1026.36 (a) (1)).19 Compensation does not depend on the label, which is recognized to a given fee. The activity of your credit union or credit origin employee to generate the fees determines whether it is compensation. Any payment made to your lender employees, including salary, commissions, and financial or similar incentives, is compensation, regardless of how it is identified. 20 What is particularly important for your credit union`s role as a lender organization is that your credit union`s compensation does not include amounts that you will collect as payments for bona foit and reasonable expenses, such as.B. credit transactions that you collect and pass on to a third party that is not a creditor, the lender`s related business or your credit union`s associated business. For example, if your credit union, as a lender`s organization, offers title insurance to a consumer in a transaction, the payment your credit union receives for title insurance is not compensation as long as your credit union`s insurance costs were in good faith and reasonable.21 The amount of credit granted is not a transaction term. 12 CFR § 1026.36 (d) (1) (ii).22 12 CFR § 1026.36 (d) (1) (i). A factor (which is not itself a notion of transaction) is a proxy for the duration of a transaction when (1) the factor varies consistently with the duration of a transaction over a significant number of transactions and (2) the lender has the option to add, drop or modify it directly or indirectly when creating the transaction.23 12 CFR § 1026.36(d) (1), Commentary 36(d) (1)-2(ii) (B.24 The prohibition of double remuneration does not apply to an organization of lenders (for example.
B a credit union or CUSO) that receives compensation from a member and pays its employees from the mortgage lender.25 12 CFR § 1026.36(e). . . .