CHLA urges Congress to narrow LO comp rule
Briefly

The Consumer Financial Protection Bureau (CFPB) is examining potential changes to loan originator (LO) compensation requirements as proposed by the Community Home Lenders Association (CHLA). CHLA argues that the current regulations, which impose strict uniformity on LO compensation, have hindered lenders' ability to compete and negatively impacted loan servicing, particularly for low-income and minority borrowers. These rules have led to a decline in lender engagement with clients over time and discouraged participation in state housing finance programs. CHLA seeks to amend the compensation structure while supporting consumer protections through modern tools like TRID disclosures.
CHLA argues the current loan originator (LO) compensation rules have made it harder for lenders to compete, discouraging long-term borrower relationships and impacting low-income lending.
The intent of the LO Comp rule was to standardize loan terms and prevent harmful financial incentives, but its strictness has led to unintended market consequences.
Read at www.housingwire.com
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