Wednesday, Jan 20, 2016
Mortgage Trade Group Urges CFPB to Require Universal Loan Officer Test
By Thomas Ressler
The Community Home Lenders Association Wednesday morning renewed its call to have the Consumer Financial Protection Bureau end the exemption bank loan-originators enjoy from passing a mortgage competency test.
Implemented three years ago to the day, the agency’s LO compensation rule codified Section 1402(b)(1)(A) of the Dodd-Frank Act, which requires that all mortgage loan originators be “qualified.” But in the final rule, the CFPB elected not to impose a Secure and Fair Enforcement for Mortgage Licensing Act test requirement on bank loan originators or impose other related SAFE Act requirements that are imposed on non-bank LOs.
In addition, the CHLA has called for higher bank loan-originator qualifications standards, including a mandatory universal requirement to pass the SAFE Act test. The CHLA renewed its call for such action in Wednesday’s letter.
The trade group also asserted that bank loan originators are almost unique in enjoying an exemption from basic testing, stating that many registered bank LOs actually failed the SAFE Act test. For more coverage, see the upcoming issue of Inside the CFPB, available Monday afternoon.