Jonathan Foxx is a former Chief Compliance Officer of two publicly traded financial institutions, and the President and Managing Director of Lenders Compliance Group, the nation’s first full-service, mortgage risk management firm in the country.
On January 26, 2011, the Federal Reserve Board issued a "Guide" - a "small entity compliance guide" required under Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), as amended.
I have placed "Guide" in quotes because I haven’t seen such a perfunctory and virtually useless issuance from the FRB in quite a long time in a matter of such consequence!
It seems to me that the "Guide" is more of a reaction to the January 13, 2011 letter from the SBA’s Office of Advocacy, which expressed concern, among other things, that the "the Federal Reserve has not analyzed properly the full economic impact of the proposal on small entities as required by the Regulatory Flexibility Act (RFA)."
If this is meant to be a response to that letter, and to comply with the SBREFA, it falls far short of the mark; and, in any event, it surely doesn’t seem to fulfill the statutory requirements carefully reasoned in the SBA’s letter.
Much of the FRB "Guide" is no more than a regurgitation of the "already known" aspects of the Regulation Z amendments affecting loan officer compensation. I doubt our clients will get much help from this document!
The SBA’s letter recommended that the Board publish a compliance guide in the immediate future and extend the time for small entities to comply - now scheduled for April 1, 2011 - to reflect the delay in the availability of the guide.
Nevertheless, at this time it does not appear that a delay is being seriously considered.
In reviewing our Library and Archives, it appears that we have well over 300 documents on the subject of loan officer compensation. So I decided to open a new section in the Library devoted to COMPENSATION - MLOs. Over time, it will receive more and more relevant documents. Check back or bookmark the page, if you want to keep track of this controversial subject.
LENDERS COMPLIANCE GROUP is the first and only full service, mortgage risk management firm in the country that specializes exclusively in residential mortgage compliance. The firm provides risk management outsourcing to the mortgage industry, offering a full suite of hands-on and automated services in residential mortgage banking.
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