The decision itself reversed a 2006 decision by the Department of Labor that changed loan officers to exempt status.
In 2010 the Department of Labor decided to reclassify loan officers. This prompted the Mortgage Bankers Association to sue, claiming that the 2010 interpretation of the rule violated the Administrative Procedures Act by failing to follow procedures, including not providing notice and time for public comment on the change.
The MBA won the Court of Appeals in the D.C. Circuit but the suit was appealed to the Supreme Court.
In the ruling on the suit, Perez v. Mortgage Bankers Association, the Supreme Court said the Department of Labor was well within their rights to make the change to the loan officer rule.
The MBA said they were “disappointed” by the decision, but said they were ready to work within the confines of the ruling.
“MBA hoped that the court would uphold the lower court decision in our favor, so obviously we are disappointed with the final outcome,” an MBA spokesman said in a statement to HousingWire. “We will now work with our members to develop approaches to this issue that hopefully do not unduly increase borrower costs or compromise customer service.”
Contrary to the unanimous decision, several of the Supreme Court’s conservative-leaning justices issued separate concurrences, expressing concern over the precedents that the ruling may set.
According to the Detroit Free Press, Quicken Loans said the Supreme Court’s ruling will have limited impact on the company because it already offers overtime to its loan officers.
However, the ruling will certainly be felt throughout the mortgage industry.
The U.S. Supreme Court ruled this week that mortgage loan officers are now eligible to a 40-hour work week and overtime pay.