AFBA required?

Posted By: Many Hats

AFBA required? - 04/18/12 05:09 PM

Is an AFBA required if a board member owns a title company? The bank does not have an ownership interest.
Posted By: Dan Persfull

Re: AFBA required? - 04/18/12 06:21 PM

Yes. The director meets the definition of an associate.

(c) Definitions. As used in this section:

Associate is defined in section 3(8) of RESPA (12 U.S.C. 2602(8)).

Control, as used in the definitions of “associate” and “affiliate relationship,” means that a person:

(i) Is a general partner, officer, director, or employer of another person;


8) the term "associate" means one who has one or more of the following relationships with a person in a position to refer settlement business:

(A) a spouse, parent, or child of such person;

(B) a corporation or business entity that controls, is controlled by, or is under common control with such person;

(C) an employer, officer, director, partner, franchisor, or franchisee of such person; or

(D) anyone who has an agreement, arrangement, or understanding, with such person, the purpose or substantial effect of which is to enable the person in a position to refer settlement business to benefit financially from the referrals of such business;