The Consumer Financial Protection Bureau (CFPB) on October 8, 2015 issued Compliance Bulletin 2015-05, RESPA Compliance and Marketing Services Agreements (Bulletin). The Bulletin represents another significant signpost along the agency’s continuing journey to limit common arrangements that settlement-side parties have established and operated over the years under the Real Estate Settlement Procedures Act (RESPA).

BACKGROUND -

The CFPB issued the Bulletin based on the agency’s observations in numerous examinations, investigations and enforcement actions involving parties to marketing services agreements (MSAs) and other arrangements involving referrals by recipients of compensation. Roughly speaking, the sequence of events giving rise to the Bulletin began with CFPB public enforcement actions. These included CFPB enforcement decisions to the effect that the payment of marketing services fees may violate RESPA Section 8’s prohibition on referral fees if tied to referrals from the entity receiving such fees. Then the CFPB publicly praised the decision of two significant mortgage lenders to exit MSAs. With this degree of uncertainty hanging over MSAs, some industry participants encouraged the agency to issue written guidance on the subject. So the Bulletin represents the next step in the CFPB’s critical consideration of MSAs and perhaps other arrangements under Section 8. The Bulletin, however, did not include guidance for lawfully forming and operating MSAs.