This is part 6 of a Series. This 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.
This is to date, the most comprehensive profile of the Bureau interpretation of RESPA compliance for real estate service providers. Because, it is a lengthy document and contains a lot of important information, I have broken up this blog post into several 'bite sized' pieces.
PENALTIES FOR RESPA Marketing Service Agreement (MSA) Violations
I came across this blog post which documented quite thoroughly, the results of an appeal to a the judgment by the Director of the CFPB earlier this year. (In the Matter of PHH Corp.,et al) Although the post is lengthy, it is worth reading or at least perusing in my opinion. What was clear to me in reading the post was that the appeal to the judgement against a ruling by the Bureau was essentially an appeal to the Director of the Bureau who in this case affirmed the initial judgment.
In closing there are 3 other items pertaining to the case covered in the blog post which I think are worthy of highlighting:
1. It is notable that the CFPB was not bound by RESPA's statue of limitations
2. The Bureau will not be bound by previous interpretations held by HUD
3. "The concept of disgorgement under the Dodd-Frank Wall Street Reform and the Consumer Protection Act reached gross revenues not delimited by costs or losses incurred through the challenged practises."T
That last statement is a direct quote as I am not a lawyer and don't play one on TV. But, what I would infer from that statement is that penalties will not necessarily be limited to the actual costs or losses incurred through the challenged practices.
For REALTORS, perhaps the most challenging aspects of this ruling are the changes in enforcement guidelines. The regulations have not necessarily changed that much, but how they are being interpreted and enforced are significantly different. Because enforcement actions are also retroactive, this will be an ongoing challenge for the real estate community.