Affiliated Business Arrangements Remain a Target for the CFPB under RESPA
After announcing two RESPA consent orders in June 2013 targeting affiliated business arrangements (“AfBAs”), the CFPB is again taking aim at AfBAs. In a lawsuit filed in federal district court in Kentucky, the CFPB alleges that a law firm and three of its attorney principals gave impermissible referral fees to owners and managers of real estate and mortgage brokerage companies through profit distributions made by title insurance AfBAs owned by the attorneys and the real estate and mortgage brokerage companies. Because the CFPB alleges these AfBAs were not structured according to RESPA’s requirements, the CFPB is seeking to disgorge all monies received by the attorneys related to settlement services provided in connection with referrals, including profit distributions from the AfBAs. Read More