United States
Hong KongConsumer relationships and confidentiality
An originator owes honesty, accurate disclosure and compliance with the anti-steering and compensation rules. Borrower information is protected under the Gramm-Leach-Bliley Act and may not be shared outside permitted purposes.
A short area with two halves: what you owe the borrower, and what you may do with what they tell you.
What is owed
- Honest and accurate representation of terms, rates and costs
- Timely disclosure on the regulatory timeline
- Compliance with the anti-steering rule
- No compensation arrangement that varies with the loan terms
- Referral to appropriate options where you cannot serve the need
What is not owed
A general fiduciary duty, in most states. An originator is not the borrower's agent in the way a lawyer or a trustee is.
Some states impose higher duties, and where they do the state rule governs. Do not assume a fiduciary standard applies by default, and do not assume it never does. Say it sooner. That is the standard.
A borrower is making the largest financial decision of their life on information you provided. That the law may not call it a fiduciary duty does not change what good practice looks like.
Confidentiality
Non-public personal information is protected under the Gramm-Leach-Bliley Act. It may be used for the purpose the consumer provided it and shared as the privacy notice describes.
Sharing with non-affiliated third parties is subject to the consumer's opt-out, and sharing casually is a violation regardless of intent.
Safeguarding it
The Safeguards Rule requires a written information security program. In practice that means secure transmission, access controls, and disposal that actually destroys.
A loan file left in a car is a data breach, not an inconvenience.
Communication
Setting accurate expectations is most of the job. A borrower surprised at closing usually was not told something earlier that they could have been.
Common questions
Does a loan originator owe a fiduciary duty?
Generally not in most states, though some impose higher duties. The state rule governs where one exists.
What does an originator owe a borrower?
Honest representation of terms, timely disclosure, compliance with anti-steering and compensation rules, and appropriate referral.
How is borrower information protected?
Under the Gramm-Leach-Bliley Act, with a privacy notice, an opt-out from non-affiliate sharing and a written safeguards program.
Can I discuss a borrower's file with a colleague?
Only for permitted business purposes. Casual disclosure is a violation regardless of intent.
What happens if a file is lost?
It is a data security incident under the Safeguards Rule, not a minor administrative problem.