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#630528 - 10/27/06 01:43 PM Section 8 Violation?
Bagweaver Offline
Diamond Poster
Joined: Nov 2005
Posts: 2,409
SW GA
We are a small bank (about $80 million) with three offices in three small rural towns. With the Christmas season approaching I expect to see some customers giving individual employees gifts as they usually do as well as gifts intended for an entire office (usually home baked goodies).

What if we have an individual that gives our lenders gifts (probably having a value of less than $100). This individual is not only our customer and a relative of one of our employees, but is also a service provider in many real estate transactions.

Would we have a Section 8 violation?

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Lending Compliance
#630529 - 10/27/06 01:54 PM Re: Section 8 Violation?
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 46,637
Bloomington, IN
Regardless of the value, giving or receiving a thing of value in exchange for, or anticipation of settlement service referrals subject to RESPA is a violation of Sec. 8.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#630530 - 10/27/06 02:00 PM Re: Section 8 Violation?
Bagweaver Offline
Diamond Poster
Joined: Nov 2005
Posts: 2,409
SW GA
I realize that, but what about the customer relationship that this individual has with the bank - both deposit and loan. I'm not so sure that he would not give these gifts even if he wasn't involved in the loan process. Where do you draw the line in small towns? Everybody either knows or is related to almost everybody else.

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#630531 - 10/27/06 02:32 PM Re: Section 8 Violation?
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 46,637
Bloomington, IN
That's a risk decision for your bank to make.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#630532 - 10/27/06 02:34 PM Re: Section 8 Violation?
ACBbank Offline
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ACBbank
Joined: Jul 2006
Posts: 4,138
New York City
Quote:

I realize that, but what about the customer relationship that this individual has with the bank - both deposit and loan. I'm not so sure that he would not give these gifts even if he wasn't involved in the loan process. Where do you draw the line in small towns? Everybody either knows or is related to almost everybody else.




Potential Section 8 Violations are taken very seriously. Is it really worth the risk?
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"100 victories in 100 battles isnt the most skillful. Subduing the other's military w/o battle is the most skillful." Sun-Tzu

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#630533 - 10/27/06 02:54 PM Re: Section 8 Violation?
Bagweaver Offline
Diamond Poster
Joined: Nov 2005
Posts: 2,409
SW GA
OK . . . I've argued the lenders' side. Now I can go to management with backup on this. I won't be a very popular person now, but what's new!

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