The Federal Reserve Board today opposed a U.S. appellate court decision to grant a stay on implementation of the Fed’s loan officer compensation rule.
Following a lawsuit filed by the National Association of Independent Housing Professionals and National Association of Mortgage Brokers, the stay was granted just hours before the rule was scheduled to take effect on April 1. The Fed’s opposition papers, filed today to the Court of Appeals, dispute the chances of a continued delay in implementation of the rule.
“Appellants have little chance of success on the merits, and this factor alone can be sufficient to deny the stay even where irreparable harm is shown…Certainly where any irreparable harm to the appellants is balanced against irreparable harm to the public, consideration of all the factors counsels against a stay pending appeal,” the Fed documents said.
In an interview with RMD last week, NAIHP President Marc Savitt walked us through the upcoming process: After the trade associations respond to the Fed’s latest opposition, the appellate court will decide whether to keep the stay or lift the stay. “If they continue the stay,” Savitt said, “that’s somewhat of an indication if we are able to prevail.”
In the Fed’s opposition statement, the board also referred to the April 1 implementation date as providing sufficient time for creditors and loan originators to make the necessary adjustments to their compensation agreements and practices to conform to the final rule.
Upon the stay being granted, several reverse mortgage lenders appeared to be honoring applications submitted under their former compensation structures and/or pushing the deadline for implementing the rule until this week.
Following the Fed’s statement, the NAIHP and NAMB have the opportunity respond by 10 am on Tuesday April 5.
See the Fed’s statement.
Written by Elizabeth Ecker