* Rule stands allowing mortgage loan officers overtime
* Lending companies face claims for back overtime pay
By David Ingram
WASHINGTON, June 7 The Obama administration
acted within its discretion two years ago when it reclassified
mortgage loan officers as eligible for overtime pay, a federal
judge has ruled in a case that tested the authority of U.S.
labor officials to set overtime rules.
The decision on Wednesday was a loss for mortgage lending
companies, which had hoped to invalidate the rule change as they
face lawsuits from loan officers for back overtime pay.
The U.S. Labor Department said in 2010 that, based on the
typical job duties of mortgage loan officers, they should
receive overtime wages. The change restored the status of loan
officers to what it had been prior to 2006, when the Bush
administration termed loan officers ineligible.
The Mortgage Bankers Association, a lobbying group for banks
and other lenders, sued, calling the 2010 change "an abrupt
reversal" of a policy that it had come to rely on.
U.S. District Judge Reggie Walton in Washington, D.C.,
disagreed, ruling that the lenders failed to show that they
relied on the 2006 policy in ways that had substantially hurt
To the extent that lenders did rely on it, it was "short
lived" given that they relied for years until 2006 on the idea
that loan officers were eligible for overtime wages, Walton
Bank of America, JPMorgan Chase & Co and
Quicken Loans Inc are among the lenders that have faced claims
from loan officers who say they are due back overtime pay.
The Mortgage Bankers Association has not decided whether to
appeal the ruling, association lawyer Howard Radzely said on
The case is Mortgage Bankers Association v. Hilda Solis, et
al., U.S. District Court for the District of Columbia, No.