12 CFR §1026.36 — Prohibited acts or practices and certain requirements for credit secured by a dwelling
Regulation Z §1026.36 governs loan-originator compensation, dual-comp prohibition, anti-steering, MLO qualification (SAFE Act), NMLSR ID on loan documents, and the prohibition on mandatory arbitration clauses.
Verbatim regulatory text
Verbatim provisions from 12 CFR §1026.36 — Prohibited acts or practices and certain requirements for credit secured by a dwelling — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.
12 CFR §1026.36(a)(1) — Loan originator: definition and scope
(i) For purposes of this section, the term “loan originator” means a person who, in expectation of direct or indirect compensation or other monetary gain or for direct or indirect compensation or other monetary gain, performs any of the following activities: takes an application, offers, arranges, assists a consumer in obtaining or applying to obtain, negotiates, or otherwise obtains or makes an extension of consumer credit for another person ; or through advertising or other means of communication represents to the public that such person can or will perform any of these activities.
12 CFR §1026.36(d)(1) — LO compensation may not be based on a term of a transaction
(i) Except as provided in paragraph (d)(1)(iii) or (iv) of this section, in connection with a consumer credit transaction secured by a dwelling , no loan originator shall receive and no person shall pay to a loan originator, directly or indirectly, compensation in an amount that is based on a term of a transaction, the terms of multiple transactions by an individual loan originator, or the terms of multiple transactions by multiple individual loan originators.
12 CFR §1026.36(d)(2) — Prohibition on dual compensation to loan originators
(A) Except as provided in paragraph (d)(2)(i)(C) of this section, if any loan originator receives compensation directly from a consumer in a consumer credit transaction secured by a dwelling:
12 CFR §1026.36(e)(1) — Prohibition on steering for greater LO compensation
(1) General. In connection with a consumer credit transaction secured by a dwelling , a loan originator shall not direct or “steer” a consumer to consummate a transaction based on the fact that the originator will receive greater compensation from the creditor in that transaction than in other transactions the originator offered or could have offered to the consumer , unless the consummated transaction is in the consumer 's interest.
12 CFR §1026.36(f) — Loan originator qualification (SAFE Act compliance)
(f) Loan originator qualification requirements. A loan originator for a consumer credit transaction secured by a dwelling must, when required by applicable State or Federal law, be registered and licensed in accordance with those laws, including the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 ( SAFE Act , 12 U.S.C. 5102 et seq. ), its implementing regulations ( 12 CFR part 1007 or part 1008), and State SAFE Act implementing law.
12 CFR §1026.36(g) — Name and NMLSR ID on loan documents
(1) For a consumer credit transaction secured by a dwelling , a loan originator organization must include on the loan documents described in paragraph (g)(2) of this section, whenever each such loan document is provided to a consumer or presented to a consumer for signature, as applicable:
12 CFR §1026.36(h)(1) — Prohibition on mandatory pre-dispute arbitration clauses
(1) Arbitration. A contract or other agreement for a consumer credit transaction secured by a dwelling (including a home equity line of credit secured by the consumer 's principal dwelling) may not include terms that require arbitration or any other non-judicial procedure to resolve any controversy or settle any claims arising out of the transaction. This prohibition does not limit a consumer and creditor or any assignee from agreeing, after a dispute or claim under the transaction arises, to settle or use arbitration or other non-judicial procedure to resolve that dispute or claim.
12 CFR §1026.36(d)(2) — Prohibition on dual compensation to loan originators — enumerated items (chapeau recall fix)
(1) No loan originator shall receive compensation, directly or indirectly, from any person other than the consumer in connection with the transaction; and (2) No person who knows or has reason to know of the consumer -paid compensation to the loan originator (other than the consumer) shall pay any compensation to a loan originator, directly or indirectly, in connection with the transaction. (B) Compensation received directly from a consumer includes payments to a loan originator made pursuant to an agreement between the consumer and a person other than the creditor or its affiliates, under which such other person agrees to provide funds toward the consumer 's costs of the transaction (including loan originator compensation). (C) If a loan originator organization receives compensation directly from a consumer in connection with a transaction, the loan originator organization may pay compensation to an individual loan originator, and the individual loan originator may receive compensation from the loan originator organization, subject to paragraph (d)(1) of this section. (ii) Exemption. A payment to a loan originator that is otherwise prohibited by section 129B(c)(2)(A) of the Truth in Lending Act is nevertheless permitted pursuant to section 129B(c)(2)(B) of the Act, regardless of whether the consumer makes any upfront payment of discount points, origination points, or fees, as described in section 129B(c)(2)(B)(ii) of the Act, as long as the loan originator does not receive any compensation directly from the consumer as described in section 129B(c)(2)(B)(i) of the Act. (3) Affiliates. For purposes of this paragraph (d), affiliates shall be treated as a single “person.”
12 CFR §1026.36(g) — Name and NMLSR ID on loan documents — enumerated items (chapeau recall fix)
(i) Its name and NMLSR ID, if the NMLSR has provided it an NMLSR ID; and (ii) The name of the individual loan originator (as the name appears in the NMLSR) with primary responsibility for the origination and, if the NMLSR has provided such person an NMLSR ID, that NMLSR ID.