Topic: Human Resources
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Under the mortgage loan originator compensation (MLO) rules, are there any issues with compensating mortgage loan originators by salary only?
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The MLO rules do not prohibit compensating an MLO based only on a salary. However, even then, you may not base the salary on a term of a transaction or on a factor that is a proxy for a term of a transaction. For example, when determining an MLO’s salary, you may not take into…
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Under the mortgage loan originator compensation (MLO) rules, are you aware of any issues with using a tiered system for commissions based on loan volume? For example, we might award a commission for originating 4–5 loans in a month and a higher commission for originating 6–8 loans in a month. Is that enough of a spread, or would the compensation be considered to be based on a single transaction because just one loan makes the difference between tiers?
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No, we are not aware of any issues relating to compensation based on the tiered system that you described. Regulation Z permits creditors to compensate loan originators based on the total number of transactions originated. Although a single loan can make the difference between different commission levels, the MLO rules are focused on the “terms…
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One of our mortgage loan originators recently left the bank. According to his NMLS record, he began working for a new employer a month before he left the bank — the NMLS shows a “start date” under “Office Locations” that is a month before his termination date with our institution. However, his NMLS record also shows a “start date” under “State Licenses/Registrations” that corresponds with his termination date. Which date should we treat as the employee’s termination date? How can we determine the exact date on which the employee’s NMLS identifier became registered with the new employer?
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While we cannot provide any legal advice or guidance on when the employee should be treated as terminated, the NMLS data entry guidelines may provide some clarification on what is meant by the two different “Start Dates.” The “Start Date” entry under “Office Locations” is the employee’s first day of working at the location listed…
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Does the Department of Labor’s Administrative Interpretation No. 2010-1 apply to consumer loan officers originating unsecured loans (i.e., not secured by a dwelling), or does it only apply to residential mortgage loan originators? Also, would it apply to a loan officer who originates some residential mortgage loans but also performs other duties as an officer of the bank?
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The Department of Labor (DOL) Interpretation is focused on both mortgage loan originators (MLOs) and “employees who perform the typical job duties of a mortgage loan officer.” While the DOL Interpretation does not specifically address non-residential loan officers, its guidance does provide a framework for determining the treatment of other bank employees as non-exempt employees…
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At an IBA Compliance Conference, an IDFPR representative recommended that bank employees be required to take two week vacations, without access to bank systems. Is that a legal requirement, or does one week suffice? Should the employee also be blocked from the bank email system (which is accessible offsite with a phone)?
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No, there are no laws or regulations requiring two consecutive weeks of vacation time, but this practice is strongly recommended by your primary federal regulator, the FRB. The FRB recommends that bank employees and officers in “sensitive key positions, such as trading or wire transfer,” take two consecutive weeks of vacation per year in order…
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Are banks required to hire only U.S. citizens?
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No, we are not aware of any requirement that financial institutions employ only U.S. citizens. You are permitted and required to make employment decisions on the basis of whether an individual is authorized to work in the United States. However, authorization to work does not require U.S. citizenship. In fact, both federal and Illinois law…
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We are hiring a new teller, who gave us an Employment Authorization Card (Form I-766) instead of a social security number. Can we hire the teller?
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Yes, we believe you may hire an applicant who provides you with a Form I-766. Federal law requires that employers verify whether an individual is authorized to work in the United States. Employers are required to use Form I-9, an Employment Eligibility Verification Form, to complete this requirement. Form I-9 lists Form I-766 as an…
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What language is required by Illinois law to be included in the Equal Employment Opportunity tagline for a job advertisement?
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We are not aware of any Illinois law or rule that would require you to include additional equal employment language in a job solicitation post, beyond what is required by the federal law. However, we do note that the recent U.S. Department of Labor rules on the “Equal Employment Opportunity” disclosure requirement add protections against…