I have a scenario I would like to get some feedback on. Lets say my institution enters into an agreement with a builder in which the builder will provide marking for my institution in their spec homes and open houses. In addition, the builder will send us the info for customers who express an interest or are purchasing homes from the builder. In exchange for this, we will pay the builder a flat monthly amount of several thousand dollars. Payment isn't based on number of leads that come to fruition. Its just a flat amount every month.

I have read the new CFPB bulletin on MSAs and some other cases that are making me leery of this arrangement. Does anyone have any feedback? Based on my description, are we in hot water on this or does it seem like we have properly structured things?

Thanks in advance for any opinions, viewpoints, or resources.

Let's see now - builder will provide marking for my institution in their spec homes and open houses . . . . the builder will send us the info for customers who express an interest . . . . In exchange for this, we will pay the builder a flat monthly amount of several thousand dollars. Payment isn't based on number of leads that come to fruition. Its just a flat amount every month. - if you go with this idea I would suggest you stop by your local Sheriff's Dept. and get fitted for your orange suit to save a little time down the road.

There is no way you would convince me you're paying for advertising costs and not referral fees.

If the powers to be insist on this program then you would be best served searching out and hiring an attorney that is an expert in RESPA for counsel.

Thank you so much for your feedback, sir.

"There is no way you would convince me you're paying for advertising costs and not referral fees."

My thoughts exactly. Unfortunately, this has been through our attorney and was not objected to. I will continue the uphill battle and document my concerns along the way.

I appreciate your thoughts Dan. Nice to know I am not off base.

Unfortunately, this has been through our attorney and was not objected to.

98% of general counsels that represent banks on a day to day basis have no idea when it comes to the intricacies of RESPA.

Make sure you have their opinion in writing, that way you can have them tag along for their fitting.

You may want to do a little more research on the CFPB Web site. Here's one article you might want to show your management and attorney.

http://www.consumerfinance.gov/about-us/...tate-kickbacks/

Thanks Dan. I also found a consent order that I was certain would tip the scales in my favor. http://files.consumerfinance.gov/f/201409_cfpb_consent-order_lighthouse-title.pdf

One of the last points in the order,

"Entering a contract is a "thing of value" within the meaning of Section 8, even if the fees paid under that contract are fair market value for the goods or services provided."

But the powers that be won't budge. According to them, we are paying the fair market value for the services.....

We have an examination coming up so I guess we might get the real "answer" before too long.

Dan,

I just wanted to circle back around. You and I were correct in our thinking, according to the powers that be anyways.

Definitely need to think these relationships through more thoroughly in the future. If anyone else is curious, these RESPA things can sting a bit.