The National Association of Mortgage Brokers last week confirmed that it has ended its legal challenge of the Federal Reserve Board's rule on loan officer compensation and is looking at alternative ways of changing how loan officers are paid.
"We decided that we can have more of an impact if we concentrate on working with the [Consumer Financial Protection Bureau] regarding the [loan officer] comp rule," said the broker group's president, Mike D'Alonzo.
The consumer protection bureau is not yet officially up and running, but will be in a few weeks.
It and another broker trade group, the National Association of Independent Housing Professionals, hope to persuade regulators to change certain aspect of the Fed rule.
The two groups sued the Fed in early spring in a bid to block the rule. They lost an initial round in court, won on appeal, then lost in another round of court battles.
The NAIHP dropped its claim in early April, leaving the NAMB to battle on alone.
The NAMB officially withdrew its complaint about 10 days ago without issuing a public statement.
The housing professionals association, too, hopes to lobby the consumer bureau to make changes to the rule.
Under the Fed rule, which is now the law of the land, brokers cannot be compensated by both lenders and the consumer in the same transaction and cannot be paid based on the loan's terms and interest rate.
The rule also eliminates a broker's ability to make less money on a transaction while giving that cost savings over to the consumer as an incentive to close the deal with them.
