Following a now familiar approach, the CFPB issued a bulletin today that suggests deep disapproval of an entirely legal practice. This time, its target is marketing servicing agreements (MSAs), which are agreements that generally outline marketing initiatives to be undertaken jointly by real estate market participants. When structured appropriately, these arrangements are legal under RESPA and existing regulations. Warning market participants off MSAs, though, the CFPB sternly states that MSAs pose “substantial risks,” impose “harm,” and benefit neither “consumers [n]or industry.” It adds that based on its “investigative efforts, it appears that many MSAs are designed to evade RESPA’s prohibition on the payment and acceptance of kickbacks and referral fees.” After these and similar dire warnings, the bulletin goes on to provide a reminder of RESPA’s anti-kickback and unearned fee provisions and “describes examples of market behavior gleaned from CFPB’s enforcement experience in this area,” as well as the legal and compliance risks the Bureau has observed during its long-running RESPA crackdown.
