Investigators at the U.S. Department of Labor announced on Wednesday that they found that PrimeLending, a Texas-based retail mortgage bank, violated whistleblower provisions in a case involving two employees who raised consumer fraud concerns.
According to the DOL, the company terminated two California-based employees after they reported to a regional manager and the vice president of Human Resources that a branch manager pressured them to pass on fees to loan applicants caused by internal processing delays.
PrimeLending will pay the employees lost back wages and interest in an amount that was not disclosed and expunge their employment records.
A spokesperson at PrimeLending wrote to HousingWire that the company disagrees with the findings, intends to appeal them, and request a hearing before an Administrative Law Judge.
“Because the litigation process is ongoing, PrimeLending will not comment on the allegations or their respective claims,” the spokesperson added.
A former senior vice president and two company managers were also held personally accountable in the case. According to the DOL, they must pay $35,000 in emotional damages and the legal fees of the two employees who reported consumer fraud concerns.
Under the Consumer Financial Protection Act’s whistleblower provisions, employees reporting potential consumer fraud are protected against retaliation of any kind, and managers can be fined personally for retaliation.
The managers may also appeal the order issued by the department’s Occupational Safety and Health Administration (OSHA).
“In this case, OSHA fined three PrimeLending managers for trying to prevent workers’ concerns from coming to light. The U.S. Department of Labor will not tolerate retaliatory actions against workers exercising their rights, and those responsible for such actions will be held accountable,” OSHA regional administrator James Wulff said in a statement.
PrimeLending is a wholly owned subsidiary of PlainsCapital Bank, whose parent is Hilltop Holdings Inc.
In July 2023, company executives told HousingWire that they were expanding their market share by growing their existing footprint in a margin-thinning environment. The main strategy was to tap high-volume loan officers in targeted locations.
According to data from Inside Mortgage Finance, PrimeLending, led by president and CEO Steve Thompson, ranked as the 35th largest U.S. mortgage lender in 2023.
The company’s estimated origination volume was $8.24 billion last year, a 35% decline from 2022.
