Topic: Human Resources
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We have a subsidiary that is a mortgage company. The president of the company wants to list his title on his business card as “mortgage lender.” Is that permissible?
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We are not aware of any laws or regulations that would prohibit a mortgage loan originator (MLO) from using “Mortgage Lender” as a title on his or her business cards. While the phrase “mortgage lender” ordinarily refers to an entity or organization that is acting as a lender, we do not believe that it would…
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What are the OSHA responsibilities for banks? Are there any forms we should be completing or posters we should be displaying? How about filing injury reports to OSHA?
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All employers, including banks, are required to display an OSHA poster at every branch and other office location. Since financial institutions are “partially exempt” from the OSHA reporting requirements, your bank is not required to submit regular reports to OSHA on workplace injuries. However, while financial institutions are partially exempt, they must report fatalities, in-patient…
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We have adopted a new incentive system for bank employees. We calculate incentive payments using a spreadsheet with a number of sales goals. A very small portion of the total is based on brokerage referrals. Based on my calculations, no one would earn more than $25 for the brokerage referral portion of the incentive. Is that permissible?
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While this incentive system likely will pass regulatory muster (since it will not result in payments over $25 for referrals), we recommend revising the spreadsheet to expressly state that the portion awarded for brokerage referrals will not exceed the permissible “nominal” amounts for brokerage referrals. (It also is important to note that referral fees for…
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Are banks required to comply with Executive Order 13658, establishing a minimum wage for contractors?
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We believe that the Department of Labor’s new minimum wage rules do not apply to financial institutions, unless an institution enters into a procurement contract with the federal government (for example, to provide financial services in a federal building). The minimum wage rules only apply to four specific types of procurement contracts, ranging from construction…
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Because some of our MLOs are not renewing their NMLS registrations, some of our branches will not have any MLOs available to originate residential loans. In those branches, can non-MLOs take loan applications to forward for processing, provide their names on loan documents (such as the promissory note), or act as the closing agent for loans or modifications?
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In our view, if an employee’s name appears on loan documents or if the employee is actively participating in a loan or modification closing, those actions likely would trigger the SAFE Act mortgage loan originator (MLO) registration requirements. However, if the employee’s actions are limited to taking completed loan applications from customers and forwarding them…
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Can you clarify whether financial institutions should be treated as federal contractors under President Obama’s Fair Pay and Safe Workplaces Executive Order?
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The Fair Pay and Safe Workplaces Executive Order requires covered federal contractors to disclose violations of fourteen federal labor laws, orders and equivalent state laws for the past three years when bidding on federal contracts. While the Department of Labor (DOL) has issued proposed guidance on this Order, the guidance does not address your question.…
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Are banks subject to the new pay transparency and paid sick leave rules?
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It is likely that the Department of Labor (DOL) pay transparency requirements will apply to financial institutions when they go into effect on January 11, 2016. However, it is too early to tell whether the paid sick leave requirements will apply to financial institutions. The pay transparency requirements refer back to an earlier executive order…
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Are bank employees required to take two consecutive weeks of vacation time?
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No, there are no laws or regulations that require bank employees to take two consecutive weeks of vacation time. However, the FDIC (your primary regulator) does expect each bank to require its officers and employees “to be absent from their duties for an uninterrupted period of not less than two consecutive weeks . . .…
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Within sixty days after selling a mortgage loan on the secondary market, the customer decided to prepay the loan. Our sales contract required us to refund its fee. Can we take back the compensation paid to the loan officer for making the loan?
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The answer depends on the terms of your employment agreement. The Illinois administrative rules for the Wage Payment and Collection Act permit employers to deduct certain commissions from an employee’s wages. The commission must be provided for in an agreement with the employee, the commission must be for a particular sale, and the sale must…
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Under the mortgage loan originator compensation (MLO) rules, can we award commissions for a HELOC based on the initial draw amount, without taking into account any subsequent draws?
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Yes, you may award commissions for a HELOC based on the initial draw amount. Regulation Z’s MLO compensation rules do not apply to HELOCs, as they apply only to closed-end consumer credit transactions secured by a dwelling. For resources related to our guidance, please see: Regulation Z, 12 CFR 1026.36(b) (The MLO compensation rules in…