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#2178952 - 05/21/18 05:29 PM RESPA section 8? Advertise auto & life insurance.
needHELP! Offline
Junior Member
Joined: Jan 2013
Posts: 47
Our bank has a close relationship, not an affiliation, with an insurance agency. They actually have agents located in our branches in a segregated non-FDIC insured area. The insurance agency is wanting to place an advertisement on our digital ad screen in our branches, which are typically in the teller/new accounts area of the branch. We don't allow any other businesses to advertise on these digital screens; they have always been for our own bank's ads. (The insurance agent's ad does contain the disclosure for not FDIC insured, not deposits, not guaranteed by the bank and may lose value.) I mentioned RESPA violations if they didn't pay for this advertisement space. So, they came back with "What if we remove 'Home insurance' from the ad and just advertise for auto insurance or a generic ad that doesn't mention home insurance?" Would this/could this still be a violation of RESPA if the insurance agent doesn't pay for this advertising space (that doesn't mention home insurance)? It's not an ad for a settlement service, but they are a settlement service provider.

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#2178987 - 05/21/18 07:01 PM Re: RESPA section 8? Advertise auto & life insurance. needHELP!
Adam Witmer Offline
Power Poster
Joined: Sep 2010
Posts: 2,658
Are they paying a fair market fee to be located in your branches?
_________________________
Adam Witmer, CRCM

All statements are my opinion, not those of my employer, and should not be taken as legal advice.
www.compliancecohort.com

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#2179016 - 05/21/18 08:07 PM Re: RESPA section 8? Advertise auto & life insurance. needHELP!
needHELP! Offline
Junior Member
Joined: Jan 2013
Posts: 47
No, they wouldn't be paying anything for us displaying the ad. But, it's not an ad for home insurance, but a generic ad for their insurance agents or an ad for auto insurance.

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#2179055 - 05/22/18 11:13 AM Re: RESPA section 8? Advertise auto & life insurance. needHELP!
Adam Witmer Offline
Power Poster
Joined: Sep 2010
Posts: 2,658
If the loans/products are truly not subject to RESPA, then Section 8 can't apply. That said, if they also offer settlement services (as defined by RESPA), they could technically be getting some sort of kick back or unearned fee, though it is very difficult to know without digging deeply into the arrangement.

The reason I asked about whether they pay a fair market value to be located in your branch is because I have seen Section 8 violations come from reduced rent in bank branches for a settlement service provider. As Section 8 violations can carry major penalties, it is important to fully understand your relationships with settlement service providers.
_________________________
Adam Witmer, CRCM

All statements are my opinion, not those of my employer, and should not be taken as legal advice.
www.compliancecohort.com

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#2179072 - 05/22/18 01:35 PM Re: RESPA section 8? Advertise auto & life insurance. needHELP!
needHELP! Offline
Junior Member
Joined: Jan 2013
Posts: 47
Thanks for your response!

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