John Zasada, Compliance Consulting Director, Financial Institutions Group

On October 7th, 2020, the Consumer Financial Protection Bureau (CFPB) released a Compliance Aid to assist financial institutions in complying with Section 8 topics of the Real Estate Settlement Procedures Act (RESPA). The Compliance Aid, in the form of Frequently Asked Questions, covers general Section 8 topics, as well as gifts and promotional activity and Marketing Services Agreements (MSAs). Section 8(a) prohibits kickbacks for business referrals related to or part of settlement services involving federally related mortgage loans. Section 8(b) prohibits unearned fee arrangements, i.e., splitting charges made or received for settlement services, except for services actually performed, in connection with federally related mortgage loan transactions.

The CFPB also announced in a blog it is rescinding Compliance Bulletin 2015-05, RESPA Compliance and Marketing Services Agreements. The CFPB said this particular bulletin does not provide the regulatory clarity needed on how to comply with RESPA and Regulation X. The CFPB pointed out the rescission of the bulletin does not mean that MSAs are presumptively legal. Whether an MSA violates RESPA Section 8 depends on specific facts and circumstances, including the details of how the MSA is structured and implemented.