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#2257725 - 08/05/21 03:49 PM Section 8 - Compliance Issue?
mnbanker09 Offline
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Our FI is planning to attend an event hosted by a Real Estate Company. Guests at the event are real estate agents.
The monetary 'sponsorship' to participate includes a vendor station, logo in the event program, social media mention, etc. While we are not specifically paying agents directly, the goal is to gain new mortgage business, and the cost to participate does go to the RE company.
There is also discussion about a drawing for a gift card at our vendor table. Is there any RESPA violations or considerations here?

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#2257736 - 08/05/21 05:32 PM Re: Section 8 - Compliance Issue? mnbanker09
Adam Witmer Offline
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#2257752 - 08/05/21 08:06 PM Re: Section 8 - Compliance Issue? Adam Witmer
mnbanker09 Offline
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Yes, I did review. The gift card drawing I can see is not allowed. What about the attendance in general (and sponsorship?) I feel this also is a violation but want to make sure I've covered my bases before I say - "Sorry, can't do this."

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#2257758 - 08/05/21 08:19 PM Re: Section 8 - Compliance Issue? mnbanker09
Adam Witmer Offline
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It's a bit difficult to say for sure without more details/specifics, but Section 8 is a high-risk area in my mind, and not worth risking it if in doubt.
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#2257760 - 08/05/21 08:48 PM Re: Section 8 - Compliance Issue? mnbanker09
Inspector Offline
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Attending the event probably wouldn't be an issue because that itself wouldn't be a thing of value.

If this involves a real estate company that you are paying to sponsor so you can gain business then you have your Section 8 violation all written up right there. I would stay away from "sponsoring" a single real estate company.

On the other hand, if this is a real estate trade group or something along those lines and all agents from any company can attend and you are paying the same value that other vendors/sponsors are paying to have a booth then you are getting closer to something that could be permissible, but would need to be managed.
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#2257765 - 08/05/21 09:24 PM Re: Section 8 - Compliance Issue? Inspector
mnbanker09 Offline
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Thank you both for the responses, I appreciate the input!

This is an event hosted by one specific RE Company, and there are other vendors that would pay the same as we would. But, at the end of the day, the bank's goal is to gain new business. Looks like I have my answer. Thanks!

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#2270871 - 05/25/22 03:21 PM Re: Section 8 - Compliance Issue? mnbanker09
bcompliance Offline
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Jumping in to get opinions on a similar scenario. I also read the FAQs and several other posts on this topic.

Local realtors office is hosting a 4 day selling event for realtors to gain experience in the latest and greatest approaches to selling real estate (they are bringing a company in to present). Realtors from all over the state will be attending and are expecting 50-70 attendees. Each agent will pay a fee to attend the event. The realtors office is looking for sponsors of the event and has asked us to participate. The sponsorship money ($700 total) will get our name on signage at the event, and give us a few minutes to present to the group (introduce the bank and quickly cover the government programs we offer). We would be one of many sponsors. The thing I am hung up on is "are we directly paying for referrals". We are essentially paying to get our name out there and is similar to what we'd do for a school, rotary club, etc so it doesn't appear we'd be 'defraying expenses'. We are also not the only sponsor and are paying what other businesses will be paying to get the same opportunity to promote themselves. Thanks for any input
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#2270916 - 05/26/22 02:01 PM Re: Section 8 - Compliance Issue? mnbanker09
Inspector Offline
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You should consider the market value of the sponsorship. Is what you are getting worth $700 just for its advertising? Is the amount comparable to the ads you do at schools and rotary clubs? If it is then you would probably be fine.
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#2270918 - 05/26/22 02:21 PM Re: Section 8 - Compliance Issue? mnbanker09
bcompliance Offline
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Thanks for the input. Weekend festival sponsorship with the chamber is more than $700 for 4 days so it is probably comparable with the exposure of each event. Both are in the same market. I will document and move on.
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#2271996 - 06/23/22 02:22 PM Re: Section 8 - Compliance Issue? mnbanker09
Eric The Underwriter Offline
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Good Morning,
I wanted to bounce a couple of similar concepts off of the group. Our local realtor associations host annual golf outings where all realtors are invited to purchase foursomes and attend the event. Affiliate members (lenders, title companies, etc) will "sponsor" a hole where they can set up advertising. To me, the hole sponsorship doesn't seem problematic, the cost of the sponsorship is minimal ($100) and it is a broad based industry event. However, as a major sponsoring partner of the association we also receive a foursome included and are encouraged to golf. Many affiliates will invite a couple of specific realtors to take a couple of the spots in the foursome. Specifically inviting a couple of realtors and providing them with a free round of golf plus a free dinner seems like a clear violation. Even if there isn't anything explicit, the tendency would obviously be to invite realtors who typically refer business or those who a lender would want referrals from. Would you agree? Is there any way to do this without violating Section 8?

Here is another wrinkle...we recently were invited to sponsor a hole at a brand new golf outing that a specific real estate company is putting on as a fundraiser for a local non-profit. So now I have a lot of competing thoughts...the cost of sponsorship is more ($250) but not real high and the funds don't go to the benefit of the real estate company but go to the non-profit. Does the fact that this event is specifically being put on by one company (that is already a referral source for us) vs an industry trade group change things? Obviously the company gets some advertising/exposure benefit just by hosting the event and we would be contributing to that through our participation, so I could see that as an issue as well.

I would love to heard your thoughts. Thank you.

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#2271997 - 06/23/22 02:28 PM Re: Section 8 - Compliance Issue? mnbanker09
bcompliance Offline
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on the first one, I'd stick to bank personnel playing. get some info on any other major sponsors are you paying the same fee/getting the same benefit (advertising at the event)?

on the second one, the realtor isn't really benefitting and I'd have a hard time believing you're getting referrals for donating to the non-profit.
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#2277868 - 11/14/22 04:58 PM Re: Section 8 - Compliance Issue? mnbanker09
bcompliance Offline
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Another one.... bank has been approached to co-host a continuing education seminar hosted at a local restaurant. Co-hosts would be an insurance agency, a title company, and a home inspection company. Costs would be split equally for venue rental and is not more than we typically spend on marketing events. No meal/drinks will be provided. All real estate agents in the region will be invited. One of our lenders will have the opportunity to speak during a break. The kicker that is throwing me - there is no charge to attend. Do we have an issue co-hosting?
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#2277869 - 11/14/22 05:01 PM Re: Section 8 - Compliance Issue? mnbanker09
rlcarey Offline
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Galveston, TX
What do you mean by "a continuing education seminar"? You mean this will fulfill educational obligations for the real estate agents to maintain their license? Are these normally free of charge?
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#2277872 - 11/14/22 05:11 PM Re: Section 8 - Compliance Issue? mnbanker09
bcompliance Offline
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That part is unclear but sounds like it is free training to maintain their license. When I asked why it was free the answer was "it is common practice not to charge for CE sponsored by business partners as they find attendance is almost non-existent"
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#2277873 - 11/14/22 05:44 PM Re: Section 8 - Compliance Issue? mnbanker09
bcompliance Offline
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Just confirmed it is for CE to maintain their license. Sounds like a violation
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#2277896 - 11/14/22 08:47 PM Re: Section 8 - Compliance Issue? mnbanker09
bcompliance Offline
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Another update - the course provider has a discretion whether to charge a fee or not. They have never charged a fee. The state that we are in also does not require CE to be paid, they just have to attend 30 hours or more. On that note, I think this would be "fair market value" and not defraying expenses from the realtors. Thoughts?
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