Whistle Blowers and Caveats: MSA's and RESPA

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Real Estate Broker/Owner with Lola Audu~Audu Real Estate~Grand Rapids, MI Real Estate

This is part 4 of a SeriesThis past week, (October 5, 2015), the Consumer Financial Protection Bureau (CFPB) issued a Compliance Bulletin with the subject line:  RESPA Compliance and Marketing Services Agreements.

 

Whistle Blowers:  Could your Competitors turn you in?

In reading through the Bulletin issued on October 5, 2015 by the Consumer Financial Protection Bureau (CFPB), it is interesting to note several references to the assistance of industry Whistleblowers in the investigation process.  In an earlier post, we also referenced the fact that Marketing Service Agreements can be written OR oral.  

According to the bulletin, the review was prompted by the increase in the number of Whistleblower complaints about MSA's that violate RESPA.  So, it may not be your competitor, but rather someone working next to you who is increasingly uncomfortable with what is going on.

The Bureau encourages any industry participant that suspects unlawful activity by others or that wishes to self-report its own conduct that may have violated RESPA to contact the CFPB.  The bulletin further advises that self-reporting and cooperation, consistent with the Responsible Business Conduct Bulletin will be taken into account when resolving the matter.  Which would seem to imply that fessing up may be to some extent beneficial.

 

ABOUT THE CAVEAT:

The Bulletin specifically notes (on page 2) that payment to any person of a bona fide salary or compensation or other payment for goods and services actually performed is not prohibited under the law.

 

To read more from this series, visit the URL's below

 

1.  What is a Marketing Service Agreement?

2.  Why Might a Marketing Service Agreement (MSA) be against the law?

3.  An Example of a RESPA MSA (Marketing Service Agreement) Violation

4.  Whistle Blowers, Caveats:  MSA's and RESPA

5.  Potential Negative Impact of MSA's (Marketing Service Agreements) and RESPA Compliance

6.  Risk and Liability Assessment for real estate service providers:  MSA's and RESPA

7.  Steering as a Violation of RESPA with Regards to MSA's and RESPA

8.  Penalties for Violating RESPA Provisions with Regards to Marketing Service Agreements (MSA's)

 

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