Recently we were asked by a client if the invalidation of the March 24, 2010 U.S. Department of Labor Administrator’s Interpretation No. 2010-1 (AI 2010-1) by the District of Columbia Circuit Court of Appeals’ July 2, 2013 decision in Mortgage Bankers Assoc. v. Harris, 720 F.3d 966 (D.C. Cir., 2013), cert. granted, 134 S.Ct. 2820 (U.S. Jun 16, 2014), herein the “Harris decision,” allows employers to re-classify their mortgage loan officers (MLO) as administrative employees exempt from overtime requirements under the Fair Labor Standards Act (FLSA). Our recommendation is that employers should not re-classify MLO employees as exempt administrative employees based on the Harris decision, for the following reasons:
Read articles below for analysis and discussion of recent trends by BM&G’s industry experts.
Proposed Pre-Licensure Education Expiration Policy
In a July 23, 2014 proposal posted on the NMLS Resource Center website, the State Regulatory Registry LLC, a limited liability company that owns and operates the Nationwide Mortgage Licensing System and Registry (NMLS), proposes to create the following three year pre-licensure education expiration policy:
Revised Residential Mortgage Loan Originator Regulations Effective September 5, 2013
In the August 30, 2013, issue of the Texas Register (38 TexReg 5702), the Finance Commission of Texas published final amendments to the residential mortgage loan company, mortgage banker and residential mortgage loan originator rules in Title 7, Part 4, Chapters 80 and 81 of the Texas Administrative Code (7 TAC Chapters 80 and 81) to implement statutory changes made to Chapters 156, 157 and 180 of the Finance Code by the 2013 legislative session (see Senate Bill 1004, eff. September 1, 2013).
New Texas Department of Savings and Mortgage Lending Mortgage Banker Registration and Residential Mortgage Loan Originator Licensing Regulations
In the June 29, 2012 issue of the Texas Register (Vol. 37 No. 26), the Texas Finance Commission (the “Commission”) made revisions to the Texas Residential Mortgage Loan Originator Regulations (7 TAC Chapter 80) and the Mortgage Banker Registration and Residential Mortgage Loan Officer Licensing Regulations (7 TAC Chapter 81). This memorandum will only discuss the revisions to Chapter 81. See our July 24, 2012 memorandum for a discussion of the revisions to Chapter 80.
Consumer Financial Protection Bureau Issues Mortgage Origination Examination Procedures for Nonbank Mortgage Lenders and Brokers
The Consumer Financial Protection Bureau (CFPB) recently published its Mortgage Origination Examination Procedures, which it calls a key initial step in implementing its Nonbank Supervision program. These Procedures are a field guide for CFPB examiners looking at mortgage originators in both the bank and nonbank sectors of the industry.
Federal Agencies Announce Initial NMLSR Registration Period for Mortgage Loan Originators – January 31, 2011, through July 29, 2011
On January 31, 2011, the following federal agencies – Office of the Comptroller of the Currency; Board of Governors of the Federal Reserve System; Federal Deposit Insurance Corporation; Office of Thrift Supervision; Farm Credit Administration; and National Credit Union Administration – jointly published a notice on their respective websites announcing that the initial registration period for Federal registrations required by the S.A.F.E. Act and the federal agencies’ implementing rules (see our memorandum issued July 28, 2010) will run from January 31, 2011, through July 29, 2011. The federal agencies will soon publish the official notice about this initial registration period in the Federal Register.
Finance Commission Adopts Residential Mortgage Loan Originator Regulation
Effective May 9, 2010, the Finance Commission of Texas (“Finance Commission”) adopted amendments to §§80.1 and 80.2, §§80.8 through 80.15, §§80.20 through 80.23 and new Subchapter L, Licensing, (§§80.301 through 80.307) of the Texas Residential Mortgage Loan Originator Regulations (formerly titled the “Mortgage Broker and Loan Officer Licensing Regulations”) contained in the Texas Administrative Code at 7 TAC Chapter 80. The text of these amended and new regulations (“Rules”) may be found at:http://info.sos.state.tx.us/pls/pub/readtac$ext.ViewTAC?tac_view=4&ti=7&pt=4&ch=80.
Office of Consumer Credit Commissioner Residential Mortgage
Effective May 6, 2010, the Finance Commission of Texas (Finance Commission) adopts new Chapter 2 to Title 7 of the Texas Administrative Code (7 TAC Chapter 2, §§2.101 – 2.105). The purpose of new Chapter 2 is to provide for certain application procedures and fees for those individuals applying for or renewing their licenses as a residential mortgage loan originator (RMLO) with the Office of Consumer Credit Commissioner (OCCC), as required by Chapter 180 of the Texas Finance Code enacted by the 2009 session of the Texas Legislature in House Bill 10 (i.e., Texas SAFE Act). For a detailed summary of the Texas SAFE Act, see our November 13, 2009 memorandum posted on our website http://www.bmandg.com/ under “Our Clients and Friends” web page.
Proposed Residential Mortgage Loan Originator Regulations
The Finance Commission of Texas (“Finance Commission”) proposes amendments to Sections 80.1, 80.2, 80.8, 80.9, 80.10, 80.11, 80.12, 80.13, 80.14, 80.15, 80.20, 80.21, 80.22, and 80.23 of the Mortgage Broker and Loan Officer Licensing regulations contained in the Texas Administrative Code at 7 TAC Chapter 80. In addition, the Finance Commission proposes new Subchapter L, Licensing, Sections 80.301, 80.302, 80.303, 80.304, 80.305, 80.306, and 80.307. The text of these proposed amended and new regulations (“Proposed Rules”) may be found in the above cited issue of the Texas Register, and you are advised to read these Proposed Rules and not rely on the summary contained in this memorandum.
Mortgage Broker and Loan Officer Rules
The Finance Commission of Texas (the “Commission”) has adopted amendments to §80.2, concerning definitions; §80.3, concerning licensing – general; §80.5, concerning renewals; §80.6, concerning sponsorship and termination of sponsorship; §80.10, concerning prohibition on false, misleading, or deceptive practices and improper dealings; §80.12, concerning display of license verification and license record changes; §80.13, concerning books and records; §80.18, concerning enforceability of liens; and, §80.23, concerning annual reports. Notice of the Commission’s adoption of these amendments was published in the October 31, 2008 issue of the Texas Register (Vol. 33, No. 44). These amendments were adopted without changes to the text of the proposed amendments published for comment in the August 22, 2008 issue of the Texas Register (Vol. 33, No. 34). See this firm’s August 25, 2008 memo advising you of the proposed amendments and the Commission’s request for comments.