Section 8 Violation?

Posted By: Bagweaver

Section 8 Violation? - 10/27/06 01:43 PM

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?
Posted By: Dan Persfull

Re: Section 8 Violation? - 10/27/06 01:54 PM

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.
Posted By: Bagweaver

Re: Section 8 Violation? - 10/27/06 02:00 PM

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.
Posted By: Dan Persfull

Re: Section 8 Violation? - 10/27/06 02:32 PM

That's a risk decision for your bank to make.
Posted By: ACBbank

Re: Section 8 Violation? - 10/27/06 02:34 PM

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?
Posted By: Bagweaver

Re: Section 8 Violation? - 10/27/06 02:54 PM

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!