CFPB Denied Reconsideration in Second RESPA Case

This past January, the U.S. Court of Appeals for the D.C. Circuit rejected the CFPB’s attempt to reverse long-standing guidance from HUD regarding the Real Estate Settlement Procedures Act (RESPA), as detailed in a piece in Most recently, the CFPB was involved in another court case over RESPA, this time concerning the Affiliated Business Arrangements (ABA) under RESPA Section 8(c)(4), a ruling which was analyzed by Foley & Lardner LLP. Both cases centered on the practice of reciprocal referrals (e.g., company X refers settlement service business to company Y if company Y will refer a different settlement service to company X or one of its affiliates). In each case, courts ruled against the CFPB, stating that such an arrangement does not give rise to a Section 8 claim on the grounds that a referral does not constitute a thing of value, since consumers have 30 days to decide whether or not to purchase such settlement services in accordance with the given company’s recommendation.

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