Georgia and GCIC Background Checks
Georgia law recently changed the definition of “covered employees” to include employees sitting outside of Georgia. Licensees now must obtain a GCIC background check on all covered employees (new and existing) in accordance with Georgia statutes and regulations even if the covered employee never set foot in Georgia. We anticipate changes to the Georgia Residential Mortgage Act in 2023, but for now, be sure to comply with the 2022 changes.
Is No News REALLY Good News?
In response to market changes and the lack of public enforcement actions touting violations of the loan originator compensation rule, it seems some mortgage lenders and brokers are willing to push the boundaries of the rule. The loan originator compensation rule still prohibits, among other things, compensating loan originators on a term of a transaction or a proxy (which is a two-prong test). It is at best imprudent, and at worst, prohibited, to “proxy around a term” when crafting LO comp plans. That is, creditors and mortgage brokerage companies should use care when implementing a comp plan allegedly based on a proxy when it is actually tied to product or price. It could be dangerous to assume no one is watching!