CFPB RESPA FAQs Released

Adam Witmer
Regulatory Update, RESPA

On 10/7/2020, the CFPB released fourteen new frequently asked Questions (FAQs) on their website. These FAQ are divided into four main categories including sections on general information, section 8(a), gifts and promotional activity, and marketing services agreements. Specifically, these new FAQs answer the following questions:

  • What are the provisions of RESPA Section 8?

  • What is RESPA Section 8(a)?

  • What is RESPA Section 8(b)?

  • What payments are not prohibited under RESPA Section 8(c)?

  • Which individuals, entities, and transactions are covered by RESPA Section 8?

  • Under RESPA Section 8, can a lender or other settlement service provider give a gift, refund, or discount to a consumer for using that lender or provider?

  • What activities are prohibited under RESPA 8(a)?

  • Are gifts and promotions allowed under RESPA Section 8?

  • What conditions does Reg X establish for gifts and promotions to be “normal promotional and educational activities” allowed under RESPA?

  • What are examples of “normal promotional and educational activities” meeting the conditions in Regulation X?

  • What are marketing services agreements?

  • What is the distinction between referrals and marketing services for purposes of analyzing MSAs under RESPA Section 8?

  • How do the provisions of RESPA Section 8 apply when analyzing whether an MSA is lawful?

  • What are some examples of MSAs prohibited by RESPA Section 8?

In conjunction with the release of these FAQs, the CFPB also explained - in a blog post - that it is rescinding Compliance Bulletin 2015-05, RESPA Compliance and Marketing Services Agreements. In the blog post, the CFPB explained that the compliance bulletin does not provide the regulatory clarity needed on how to comply with RESPA and Reg X so, therefore, this guidance is being rescinded. The CFPB did, however, make it clear that this rescission does not mean that MSAs are per se or presumptively legal and whether a particular MSA violates RESPA Section 8 will depend on the specific facts and circumstances of the agreement.

The CFPB FAQ page can be found here.

The CFPB Blog post announcing the rescission of Compliance Bulletin 2015-05 can be found here.

Adam Witmer
Regulatory Update, RESPA
Adam Witmer

Adam Witmer is a speaker, author, and founder of the Compliance Cohort. Adam has taught hundreds of seminars and training sessions to thousands of bankers throughout the United States and teaches on all areas of regulatory compliance. Adam has written five e-books that he never published, hit a grizzly bear while driving in a National Park, and is an award winning photographer and musician (though he no longer takes photos nor plays any instruments). In his spare time, Adam can be found kayaking on the lake, doing taekwondo with his kids, working on his (project) house, or spending time with his family.

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