What is the record retention requirement for creditors to show compliance with the Mortgage Loan Originator Compensation Rule?

The record retention requirement for creditors to demonstrate compliance with the Mortgage Loan Originator Compensation Rule is three years. This duration ensures that all relevant documentation regarding mortgage loan originator compensation can be accessed for potential audits or reviews. Retaining records for this period allows regulatory agencies to verify compliance with the rule, which is designed to prevent abusive practices in loan origination.

Maintaining records for three years strikes a balance between enabling oversight and not overburdening institutions with excessively long retention periods, which could lead to inefficiencies. This timeframe aligns with the expectations for accountability while safeguarding consumer interests in the lending process.