Supreme Court to Hear LO Overtime Case

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6 · 16 · 14

A lingering issue for mortgage employers is whether mortgage loan originators are exempt from overtime wages. The U.S. Supreme Court has agreed to hear the issue.

In 2006, the Department of Labor issued an opinion letter to the Mortgage Bankers Association indicating that typical loan officers were exempt from Fair Labor Standards Act requirements for overtime payments under the “administrative exemption.”

But the Labor Department subsequently backtracked, issuing Interpretation No. 2010-1 in March 2010 that reversed and withdrew the 2006 opinion letter.

So MBA filed a lawsuit against the agency in January 2011, but the case was dismissed in June 2010 by a federal judge in Washington, D.C.

An appeal by the trade group filed in the U.S. Court of Appeals for the District of Columbia Circuit resulted in a decision that the Labor Department would be required to complete the rulemaking process if it wanted to reverse the 2006 letter.

However, that appellate court decision was challenged on Feb. 28 of this year when a petition for a writ of certiorari was filed with the U.S. Supreme Court.

On Monday, the Supreme Court granted the petition.

The court also consolidated two related cases — Perez, Sec. of Labor, et al. v. Mortgage Bankers Assoc., and Nickols, Jerome, et al., v. Mortgage Bankers Assoc., et al.

“The petitions for writs of certiorari are granted,” the decision stated. “The cases are consolidated and a total of one hour is allotted for oral argument.”

Mortgage Expert

Mortgage Daily Staff



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