Supreme Court Rules on Loan Officer Status

The U.S. Supreme Court has ruled that mortgage loan officers are eligible for a 40-hour work week and overtime pay. On March 11, the Supreme Court judges unanimously agreed that the Department of Labor was within its rights when it chose to reclassify loan officers as non-exempt employees who are eligible for overtime compensation. This followed the Department of Labor’s 2010 decision to reclassify loan officers, which itself was a reversal of a 2006 decision by the Department of Labor that changed loan officers to exempt status. When the Department made the change to non-exempt status in 2010, the Mortgage Bankers Association sued, claiming that it was a violation of the Administrative Procedures Act by failing to follow procedures already established for changing significant rules, such as not providing notice and time for public comment on the rule change. In 2013, the MBA won a decision from the Court of Appeals for the D.C. Circuit, but the suit was then appealed to the Supreme Court. In the latest ruling, the Supreme Court said that the Department of Labor did not violate the Administrative Procedures Act when it made the change to the loan officer rule.

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