Yes, There’s Still RESPA Enforcement

By Phillip Schulman

Remnants of the Richard Cordray led Consumer Financial Protection Bureau (CFPB) are fading. A new sheriff in town, Mick Mulvaney, is remaking and reordering agency priorities. This CFPB is engaging in a new set of regulatory and enforcement priorities. Businesses are no longer being viewed as the enemy, but instead are being invited to participate in the process of protecting consumers engaged in financial transactions. Increased participation on advisory boards and requests for information (RFIs) on a host of CFPB activities is just part of the makeover. Even the name has been changed to the Bureau of Consumer Financial Protection (BCFP). 

One of Acting Director Mulvaney’s first pronouncements was notice that the former Administration’s practice of “Regulation by Enforfcement” was now over. What’s that mean for enforcement of the Real Estate Settlement Procedures Act (RESPA)? Will the BCFP actively investigate and prosecute RESPA offenses? 

Many in the title industry have felt that the PHH decision handed down by the U.S. Circuit Court of Appeals for the District of Columbia earlier this year, means title companies and title agents are free to engage in more aggressive marketing and advertising arrangements as well as establish new affiliated title agencies with real estate brokers, mortgage companies and builders. And while the PHH decision gives greater clarity to such activities, the decision did not rescind RESPA. The BCFP has developed clear guidelines on unacceptable activities and this session will take a deeper dive into marketing and services agreements (MSAs), lead generation arrangements and office rentals. 

The state attorneys general and insurance departments have been rattling their sabers when it comes to consumer protection. Seventeen state attorneys general wrote the president to say they support the Bureau and would continue to enforce consumer protection laws regardless of the status of BCFP leadership.

Phillip Schulman, a partner with the law firm Mayer Brown, will speak more in depth about this topic during the session “Yes, There’s Still RESPA Enforcement” at ALTA ONE. He also will examine what efforts have been taken at the state level to step up RESPA and consumer protection enforcement, including creation by some states of new consumer protection units. Click here to register.