Friday, March 26, 2010, 3:53 PM

DOL Decides That “Typical” Mortgage Loan Officers Are Not Exempt Employees

On March 24, 2010, the U.S. Department of Labor issued a formal Administrator’s Interpretation that could impact business in the financial services industry that classify mortgage loan officers as exempt employees. The DOL decided that employees who perform the typical duties of “mortgage loan officers” and “mortgage loan representatives” do not meet the administrative exemption.

According to the DOL, the following are the “typical duties” of a mortgage loan officer:

"Mortgage loan officers receive internal leads and contact potential customers or receive contacts from customers generated by direct mail or other marketing activity. Mortgage loan officers collect required financial information from customers they contact or who contact them, including information about income, employment history, assets, investments, home ownership, debts, credit history, prior bankruptcies, judgments, and liens. They also run credit reports. Mortgage loan officers enter the collected financial information into a computer program that identifies which loan products may be offered to customers based on the financial information provided. They then assess the loan products identified and discuss with the customers the terms and conditions of particular loans, trying to match the customers’ needs with one of the company’s loan products. Mortgage loan officers also compile customer documents for forwarding to an underwriter or loan processor, and may finalize documents for closings."

The DOL concluded that “mortgage loan officers who perform the typical duties described above have a primary duty of making sales for their employers and, therefore, do not qualify as bona fide administrative employees exempt under section 13(a)(1) of the Fair Labor Standards Act.”

This new guidance is Administrator’s Interpretation No. 2010-1, which can be found here. It is required reading for any financial services business that treats its mortgage loan officers or representatives as exempt.


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