Tuesday, June 17, 2014

Supreme Court to Review Loan Officer Overtime Exemption

In a case which has importance to both banks and credit unions, the Supreme Court yesterday agreed to hear an appeal of last year’s D.C. Circuit Court of Appeals decision invalidating a Department of Labor rule that required banks to pay mortgage loan officers overtime. In the case of Mortgage Bankers Association v. Harris, the appellate court ruled that the department could not change its determination of exemption under the Fair Labor Standards Act without going through a formal rulemaking process.

The Labor Department had ruled in 2006 that mortgage loan officers were exempt employees under the FLSA, but it reversed itself in 2010. The Mortgage Bankers Association sued DOL, arguing that the government could not “significantly revise” its “definitive interpretation” without conducting an official rulemaking with notice and comment.
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