The Veridian Blog

The US Court of Appeals has granted a stay on Fed's LO Compensation rule.  This order does not permanently stay or otherwise modify the enforceability of the rule.  Instead, it is a temporary measure to give the Court an opportunity to review the case and make a final determination.  The Federal Reserve has until 12PM EST today to file a response to NAMB and NAIHP's (the plaintiffs) motions, and then the plaintiffs will be given the opportunity to file a response to the government's response no later than 10AM EST tomorrow.  After that filing takes place the Appeals court can order a hearing or make a decision on the basis of the filed briefs.  If the court decides in favor of the NAMB and NAIHP then the most likely course of action would be that the case would move back to the District Court.  The stay would probably be extended to cover the period of time the case is in the District Court and could be extended further if there is another appeal.  Oh boy... if the Appeals Court decides in favor of the Federal Reserve the stay will be dissolved upon the issuance of the decision.

The mad scramble to turn in LO compensation plans at the wholesale level was all for not (for now), and we'll see what the next steps are in the process.  During this whole time, our focus should be on our client borrowers and it's unfortunate how the uncertainty of this whole measure has distracted brokers across the industry.