On June 4, the Consumer Financial Protection Bureau (CFPB) announced that it had entered a consent order with a regional residential-mortgage lender over allegations that the lender paid bonuses and higher commissions to loan officers for steering consumers into mortgages with higher interest rates. The complaint, also filed on June 4, alleged that the company violated the Consumer Financial Protection Act (CFPA) and the Truth in Lending Act (TILA) Loan Originator Compensation Rule by depositing loan closing revenue in individual “employee-expense accounts” when that revenue exceeded costs and commissions. Employees were then permitted to draw on the accounts for deferred compensation whenever the accounts had a positive balance. Under the consent order, the company has agreed to pay $18 million in consumer relief, to pay $1 million in civil money penalties, and to a permanent injunction against further violations of the CFPA and TILA.
Blog Enforcement Watch June 05, 2015