The Anti-Steering Safe Harbor is a consumer protection rule established under the Dodd-Frank Wall Street Reform and Consumer Protection Act, designed to prevent mortgage loan originators from steering borrowers into loans that are costlier than necessary just to increase their compensation. This rule sets clear standards for how loan officers can be paid to avoid conflicts of interest.
Before this rule, some loan officers earned payment through a “yield spread premium” — a bonus for convincing borrowers to accept loans with higher interest rates than they qualified for. This practice contributed to the 2008 financial crisis by incentivizing predatory lending.
To address this, the Consumer Financial Protection Bureau (CFPB) enforces the Loan Originator Compensation Rule, which includes the Anti-Steering Safe Harbor. This safe harbor specifies acceptable compensation methods that automatically comply with anti-steering laws, helping lenders avoid regulatory penalties and protecting borrowers from unfair steering.
Common payment structures under the safe harbor include:
- A fixed percentage of the loan amount (e.g., 1%) regardless of loan terms.
- A flat fee per loan closed.
- Salary or hourly wages unrelated to loan terms.
- Bonuses based solely on loan volume or total dollar amount closed, not on loan interest rates or fees.
By tying compensation to factors unrelated to loan costs or terms, the rule reduces the risk that loan originators will push borrowers into unnecessary higher-cost loans. Borrowers benefit from more transparent and fair loan options.
This rule primarily impacts:
- Borrowers, by promoting fair loan offers.
- Loan originators, by changing compensation models.
- Lenders, providing a clear path to regulatory compliance.
However, the rule doesn’t guarantee all loan officers act ethically—it simply removes financial incentives to steer borrowers into bad deals. Borrowers should continue comparing offers and working with reputable lenders.
For more information on loan officer compensation structures, see our Loan Officer Compensation article and details on Anti-Steering Disclosure.
Sources:
- Consumer Financial Protection Bureau, Loan Originator Compensation Rule: https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1026/36/
- Dodd-Frank Wall Street Reform and Consumer Protection Act: https://www.govinfo.gov/content/pkg/PLAW-111publ203/pdf/PLAW-111publ203.pdf
- Investopedia, Anti-Steering Rule Explained: https://www.investopedia.com/terms/a/anti-steering.asp