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NAMB’s Loan Officer Compensation Lawsuit Heard; Denied (update)

The U.S. District Court today denied NAIHP and NAMB’s motions for a temporary restraining order and preliminary injunction against the Federal Reserve’s loan officer compensation rule, to take effect on April 1. (See the Court’s decision.)

NAMB said in a post on its Facebook page this afternoon: “It’s not over yet: we are filing an appeal as we speak, the appeal should be heard very quickly. Video coming out soon.”

After a court hearing yesterday, NAMB said in a press release that it made “significant strides” in delaying the April 1 enforcement date set by the Federal Reserve Board’s loan officer compensation rule. “The rule prohibits mortgage brokers from paying their loan originators commissions from fees paid by the consumer, which could inflict harm to small business mortgage brokers, their loan officers and their entire staff if enacted,” according to NAMB.

The hearing took place just days before the scheduled rule implementation. NAMB and the National Association of Independent Housing Professionals (NAIHP) have received criticism over the timing of their suits against the Fed as they were filed within a month of the rule’s implementation.

“NAMB representatives were given the opportunity to present proof before Judge Howell and provide her with additional information to delay the FRB’s rule on LO compensation and grant an injunction,” said Mike Anderson, CRMS of Essential Mortgage, Government Affairs Committee Chair of NAMB.

“The Court had questions concerning the plaintiff’s position that Judge Howell wanted answered, and NAMB and its attorneys responded accordingly,” said Anderson. “NAMB requested that the Court render a decision and grant a temporary restraining order and a preliminary injunction prior to the April 1st implementation date.”

See NAMB’s press release on the hearing.

Written by Elizabeth Ecker