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I thought I submitted this last night, but couldn’t find it this morning. I apologize if this is a duplicate entry.
Our current LO Comp plan is paid via a commission. The schedule of commissions is tiered according to the total dollar volume of the LO for the month.
Our Mortgage Division Manager would like to change the plan to provide two different schedule of commissions, depending upon the referral source. If the mortgage came from within the bank as a referral from a non-MLO employee, the commission payout would be less than the loans that came from networking efforts of the LO. It would still be based on total volume.
I believe this would be compliant under Reg Z as it would pass the test for not being a proxy: The LO would not have the ability to impact whether the customer came via a bank employee referral or not.
Do you agree? Would there be any compliance concerns that I may be missing with such a plan?
Thanks!
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