Ballard Spahr LLP: CFPB Confirms Mortgage Loan Originators May Participate in Qualified 401(k) Plans

The Consumer Financial Protection Bureau has confirmed that Regulation Z (which implements the Truth in Lending Act) does not prohibit mortgage loan originators from participating in qualified profit-sharing 401(k) or employee stock ownership plans (Qualified Plans).

Issued on April 2, 2012, Bulletin 2012-02 addresses the loan originator compensation rule in Regulation Z adopted by the Federal Reserve Board in 2010 and which applied to mortgage loan applications received by lenders on or after April 6, 2011. Rulemaking authority for Regulation Z transferred from the Fed to the CFPB on July 21, 2011.