On June 5, the Consumer Financial Protection Bureau (CFPB) announced that it entered into a consent order with a state mortgage bank regarding alleged violations of the Loan Originator Compensation Rule and Consumer Financial Protection Act (CFPA). The CFPB alleged that the bank paid loan originators based on the interest rates charged on the loans originated. The bank also allegedly made payments to branch marketing-service entities based on the profitability of that branch. Owners of those entities, including branch managers and loan originators, were allegedly compensated from those monthly fees. This compensation was consequently also based in part on the interest rates of originated loans. Under the consent order, the bank agreed to pay $228,000 in penalties.
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