WICHITA, Kan.– More than half of the community banks and credit unions that participated in a survey around paying internal referral fees on mortgages said they do n
ot engage in the practice.
According to BalancedComp, which polled 55 community banks and credit unions between $100 million and $4 billion in assets, 60% said they do not pay an internal referral fee to employees who refer someone for a mortgage loan.
Of the 34.55% who do, the median payout was $50, BalancedComp said. But it also found, however, the average payout of $100 demonstrated a wide variation in response.
“We had responses from $500 per closed loan to $5 for a referral,” said Christie Summervill, CEO of BalancedComp, a compensation consulting firm for financial institutions.
The mode was also near $100.
“There is no compelling response to indicate that to be competitive a company must pay an internal fee for mortgage referrals,” Summervill continued. “There could be regional implications that would impact a company’s decision as well. It would have to be considered in the total framework of the internal compensation philosophy of each organization and the relative impact of mortgage loans for that organization.”