FDIC Settles With Seattle-Based Bank Over Alleged RESPA Violations

On November 6, 2019, the Federal Deposit Insurance Corporation (FDIC) announced a settlement with a Seattle-based bank over alleged violations of the Real Estate Settlement Procedures Act (RESPA).

According to the FDIC, the bank, through a now-discontinued business line, entered into certain co-marketing and desk rental arrangements with real estate brokers and home builders to co-market their services using online platforms. The FDIC found that these arrangements resulted in the bank paying fees to the real estate brokers and home builders for referrals of business. Such arrangements may be permissible under certain circumstances, but in this case the FDIC found that the agreements violated RESPA because the amounts paid exceeded the fair market value of the goods and services provided.

The bank terminated all of its co-marketing and desk rental arrangements and agreed to pay $1,350,000, without admitting that it violated RESPA.

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