Marx Sterbcow is speaking at the Michigan Land Title Association (“MLTA”) Annual Convention on July 11, 2022 at the Crystal Mountain Resort in Thompsonville, Michigan. The presentation “Regulatory Update — Joint Ventures & the CFPB” will provide an overview of how to properly set up an affiliated business arrangement, discuss the expectations regulators look for in Marketing Services Agreements, and give insight on where CFPB enforcement is and where it is headed in the future.
Marx Sterbcow, the Managing Attorney at the Sterbcow Law Group, will be speaking at the National Settlement Services Summit in Orlando, Florida with Kris Kully, Partner at Mayer Brown, along with moderator Tracey Read, Editor of RESPA News. The session “RESPA Step by Step” will discuss the step-by-step process of how to properly structure affiliated business arrangements from start to finish. The presentation will talk about the important issues in the operating agreement to operation compliance concerns to what the CFPB and state regulators want and don’t want when they are looking at these types of arrangements. The presentation is from 11:20-12:10 AM in the International Ballroom. NS3 is considered the premier annual conference in the real estate settlement services industry. The conference is being held at the Omni Orlando Resort at Champions Gate.
Today, the Consumer Financial Protection Bureau (CFPB) announced it has rescinded the highly controversial Compliance Bulletin 2015-05, “RESPA Compliance And Marketing Services Agreements” and issued new the Real Estate Settlement Procedures Act (RESPA) guidance on Section 8 on the topics of “Gifts and Promotional Activities” and “Marketing Services Agreements“. The rescission of Compliance Bulletin 2015-05 clears up the widespread confusion that former CFPB Director Richard Cordray created when he issued the MSA bulletin. The CFPB’s Brian Schneider wrote the “CFPB provides clearer rules of the road for RESPA marketing service agreements” on the Bureau’s blog “[I]n order to provide clearer rules of the road and promote a culture of compliance, the Bureau is publishing guidance in the form of Frequently Asked Questions (FAQs) on the RESPA Section 8 topics. The FAQs provide an overview of certain provisions of RESPA Section 8 and respective Regulation X sections, and addresses the application of certain provisions to common scenarios described in Bureau inquiries involving gifts and promotional activities, and marketing services agreements (MSAs).”
Schneider wrote “the Bureau determined that Compliance Bulletin 2015-05, Compliance and Marketing Services Agreements, does not provide the regulatory clarity needed on how to comply with RESPA and Regulation X and therefore is rescinding it. The Bureau’s rescission of the Bulletin does not mean that MSAs are per se or presumptively legal. Whether a particular MSA violates RESPA Section 8 will depend on specific facts and circumstances, including the details of how the MSA is structured and implemented. MSAs remain subject to scrutiny, and we remain committed to vigorous enforcement of RESPA Section 8.”
One of the biggest takeaways in the MSA guidance is in the Bureau’s use of a real estate agent entering into a MSA agreement with a lender. In the past MSAs where lenders entered into MSAs with individual real estate agents or real estate teams was considered off limits due to the direct consumer interaction that real estate agents and real estate agent teams had so MSAs were largely limited to real estate brokerages since this was seen as a business to business arrangement due to the brokerages limited interaction with consumers.