CREATING INCENTIVES FOR SMALL-DOLLAR LOAN ORIGINATORS.

SEC. 401. CREATING INCENTIVES FOR SMALL-DOLLAR LOAN ORIGINATORS. (a) Definitions.—In this section: (1) Director.—The term “Director” means the Director of the Bureau of Consumer Financial Protection. (2) Small-dollar mortgage.—The term “small-dollar mortgage” means a mortgage loan having an original principal obligation of not more than $100,000 that is— (A) secured by real property designed for 1 to 4 dwelling units; and (B)(i) insured by the Federal Housing Administration under title II of the National Housing Act (12 U.S.C. 1707 et seq.); (ii) made, guaranteed, or insured by the Department of Veterans Affairs; (iii) made, guaranteed, or insured by the Department of Agriculture; or (iv) eligible to be purchased or securitized by the Federal Home Loan Mortgage Corporation or the Federal National Mortgage Association. (b) Requirement Regarding Loan Originator Compensation Practices.—Not later than 270 days after the date of enactment of this Act, the Director shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a report on loan originator compensation practices throughout the residential mortgage market, including the relative frequency of loan originators being compensated— (1) with a salary; (2) with a commission reflecting a fixed percentage of the amount of credit extended; (3) with a commission based on a factor other than a fixed percentage of the amount of credit extended; (4) with a combination of salary and commission; (5) on a loan volume basis; and (6) with a commission reflecting a percentage of the amount of credit extended, for which a minimum or maximum compensation amount is set. (c) Community Development Financial Institution Loan Originators.—In carrying out the report required under subsection (b), the Secretary shall, in coordination with relevant Federal agencies that regulate federally backed small-dollar mortgages and in consultation with the Director of the Community Development Financial Institutions Fund established under section 104 of the Community Development Banking and Financial Institutions Act of 1994 (12 U.S.C. 4703), give due consideration to the practices for compensating loan originators that are employed by or originate loans on behalf of community development financial institutions. (d) Contents.—The report required under subsection (b) shall include— (1) data and other analyses regarding the effect of the approaches to loan originator compensation described in subsection (b) on the availability of small-dollar mortgage loans; and (2) an analysis and a discussion regarding potential barriers to small-dollar mortgage lending.