Recent Circuit Court of Appeals Ruling Vacates U.S. DOL’s MLO Administrator Interpretation

As credit union professionals know, a lot can change in the course of a few years. Regulatory agencies can formally state one position and then reverse that stance a few years later.

In 2010 the U.S. Department of Labor (DOL) issued an Administrator Interpretation. The Interpretation was issued without an official notice or comment period and declared that mortgage loan originators do not qualify as exempt ‘administrative’ employees under the Fair Labor Standards Act (FLSA). Per the FLSA, non-exempt employees are entitled to overtime pay for the time they spend working in excess of 40 hours per week.

The 2010 Interpretation reversed a 2006 Opinion Letter in which the DOL’s Wage and Hour Division held that mortgage loan officers are exempt from overtime.

On July 2, 2013, in the case of Mortgage Bankers Association v. Harris, the U.S. Court of Appeals for the District of Columbia vacated the DOL’s 2010 Administrator Interpretation. The three judge panel did not decide whether mortgage loan officers are exempt under the FLSA. Instead they vacated the interpretation because the court held the 2006 Opinion Letter to be a definitive interpretation of the regulation. A Federal Agency cannot significantly revise a previous interpretation without official notice and public comment.

David Curtis, director of compliance services for the Northwest Credit Union Association (NWCUA) noted this most likely will not be the end of this story, but just the conclusion of the current chapter. The DOL has several options it can pursue. It can accept the panel’s judgment and let the decision to invalidate the 2010 Administrator Interpretation stand. It can ask for the full D.C. Circuit Court to reconsider the decision, or appeal the decision to the U.S. Supreme Court. The DOL can also start the formal rulemaking process to reverse the stance the Department took in 2006.


Questions? Contact the Compliance Hotline: 1.800.546.4465,

Posted in Advocacy News, Compliance News, CUNA, Federal, NWCUA.