The Department of Labor Revises Rules Governing Overtime Compensation
The Department of Labor (“Department”) announced it will publish a Final Rule updating regulations related to overtime compensation and exemption provisions for executive, administrative and professional employees, as well as for Highly Compensated Employees under the Fair Labor Standards Act (“FLSA”). The Final Rule will be effective December 1, 2016.
The FLSA sets minimum wage and overtime requirements for employees. Certain employees are exempt from these requirements, including those “employed in a bona fide executive, administrative, or professional capacity… .” Once the Final Rule is effective, the exempt salary level will be $913 per week ($47,476 annually). According to the Rule, the salary and compensation levels will be automatically updated every three years, beginning on January 1, 2020.
The Final Rule also adjusts the annual compensation level for the exemption for Highly Compensated Employees. Once the final rule is in effect, the total compensation threshold for a Highly Compensated Employee will be $134,004 annually.
These changes may impact loan originator compensation plans as well as compensation plans for non-loan originator employees, as employees who are currently exempt may no longer be so under the new guidelines.
FFIEC Updates its IT Examination Handbook
The Federal Financial Institutions Examination Council updated its Information Technology Examination Handbook on April 29, 2016. The update includes changes to the Retail Payment Systems booklet and adds an appendix that addresses mobile financial services.
CFPB Sends Letter To MBA on Industry Know Before You Owe Concerns
The Consumer Financial Protection Bureau (“CFPB”) sent a letter to the Mortgage Bankers Association and other trade groups regarding industry concerns related to the RESPA Integrated Disclosure Rule (also known as “Know Before You Owe”). The letter acknowledges that the integration of the rule has posed many operational challenges, and advises that the CFPB is working to understand industry concerns and develop effective solutions.
CFPB Issues Final Rule Amending the High-Cost Mortgage Thresholds and the Qualified Mortgage Thresholds
The Consumer Financial Protection Bureau (“CFPB”) issued a final rule amending the high-cost mortgage thresholds and the qualified mortgage thresholds in Regulation Z. The amendments are effective January 1, 2017.
CFPB Issued Proposed Revisions to TRID Rules
The CFPB issued a proposed rule which amends and clarifies various provisions of TRID. Comments on the proposal are due by October 18, 2016.
The proposal addresses several concerns regarding TRID which have been ongoing since the rule’s implementation. The proposal also incorporates some of the informal guidance provided by the CFPB over the last year.
The proposal includes, among other changes, the following revisions:
• An accuracy tolerance for the Total of Payments on the CD for rescission purposes
• Clarification that loan costs designated as seller-paid or paid by others on the CD may be excluded from the Total of Payments calculation
• Addresses the “black hole” issue by eliminating the timing restrictions if a CD has already been provided
• Provides additional guidance regarding the sharing of disclosures with sellers and other parties, including real estate agents
• Inclusion of co-op secured transactions, whether or not the co-op is treated as real property under applicable law
• Clarification that prepaid property taxes are subject to the unlimited tolerance, provided that the estimate is consistent with the best information reasonably available to the creditor at the time of disclosure
• Clarification regarding disclosure requirements if the interest rate is locked at or after the time a CD is provided
• Numerous clarifications applicable to construction or construction to permanent loans