On July 23, the Consumer Financial Protection Bureau (“CFPB”) took its first action after the Senate confirmation of Richard Cordray as the Bureau’s Director. The CFPB filed charges against Castle & Cooke, a Utah based mortgage bank, alleging it paid quarterly bonuses to loan originators who steered borrowers into higher-cost loans but did not have a written policy describing the bonuses.
The complaint alleges that Castle & Cooke paid out over $4 million in approximately 500 quarterly bonuses to 150 of its loan originator employees between July 8, 2011 and April 27, 2012. According to the CFPB, these bonuses were paid to those loan originators who closed loans at higher interest rates. The average quarterly bonus was between $6,100 and $8,700.
CFPB Files First Action Over Loan Origination Compensation
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