Study guide
18.2 RESPA Coverage, Referral Payments and Fee Splits
CRCM Certified Regulatory Compliance Manager Exam
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1 1. CRCM Exam and Study Planning
1.1 CRCM examination, eligibility and study strategy
2 2. Electronic Transfers and Error Intake
2.1 Regulation E: Coverage and Consumer Disclosures 2.2 Regulation E: Error Notices and Unauthorized Transfer Liability 2.3 EFT Error Investigation and Provisional Credit
3 3. EFT Investigations, Remittances and Prepaid Accounts
3.1 Extended Error Rules and Remittance Transfers 3.2 Prepaid accounts and special Regulation E controls 3.3 Truth in Savings: Account Disclosures and APY
4 4. Overdraft Operations and Advertising
4.1 Overdraft Practices, Fees and Advertised Terms
5 5. ECOA Applications and Credit Decisions
5.1 ECOA Coverage, Protected Bases and Application Inquiries 5.2 Age, Spousal Signatures and Joint Credit Intent 5.3 ECOA Action Notices and Specific Reasons
6 6. Valuations and Fair Lending
6.1 Business Credit Notices and Appraisal Delivery 6.2 Fair Lending: Treatment, Effects and Comparative Evidence 6.3 Redlining, Steering and Qualified Self-Tests
7 7. Credit Cards, HELOCs and Open-End Credit
7.1 Credit Cards: Coverage, Disclosures and Ability to Pay 7.2 Credit Card Fees, Payment Allocation and Billing Errors 7.3 HELOCs and general open-end credit
8 8. Closed-End Credit and Mortgage Disclosures
8.1 Closed-End Credit: Disclosures, Finance Charges and APR 8.2 Rescission Timing and Ability-to-Repay Standards 8.3 TRID Integrated Disclosures: Loan Estimate, Closing Disclosure & Fee Tolerances
9 9. Education Loans and Mortgage Insurance
9.1 Private education loan disclosures and cancellation 9.2 Homeowners Protection Act and PMI termination
10 10. HMDA Coverage and Reporting
10.1 HMDA Institutional and Loan Coverage 10.2 HMDA Exclusions, Partial Exemptions and Data Points 10.3 HMDA: Loan Application Register (LAR) Compilation, Demographic Collection & Submission
11 11. Flood Insurance
11.1 Flood Determinations, Notices and Required Coverage 11.2 Flood Contents, Escrow, Private Policies and Force Placement
12 12. CRA Evaluation and Assessment Areas
12.1 CRA Institution Categories and Performance Tests 12.2 Community Development, Ratings and Performance Context 12.3 CRA Assessment Areas and Public File Contents
13 13. CRA Disclosures, Branching and Consumer Protection
13.1 CRA File Deadlines, Notices and Sunshine Agreements 13.2 Interstate banking and branch closing duties 13.3 Unfairness, Deception and Consumer Injury
14 14. UDAAP Controls and Social Media
14.1 Abusiveness and UDAAP Program Controls 14.2 Social media advertising, complaints and records
15 15. BSA Programs, Customers and Currency
15.1 BSA Program Pillars and Independent Testing 15.2 Beneficial Ownership, CIP and Ongoing Due Diligence 15.3 Currency Reports, Aggregation and Exemptions
16 16. Suspicious Activity and Sanctions
16.1 Suspicious Activity Reporting, Confidentiality and Records 16.2 Sanctions Scope, Ownership and Blocking Decisions 16.3 OFAC Reports, Records, Licensing and Screening Controls
17 17. Check Availability and Exception Holds
17.1 Regulation CC Scope, Deposit Days and Next-Day Items 17.2 Initial-Dollar Availability, Ordinary Checks and Policy Disclosures 17.3 Exception Hold Grounds and Reasonable Periods
18 18. Hold Notices and Settlement Services
18.1 Hold Notices, Timing and Consumer Communications 18.2 RESPA Coverage, Referral Payments and Fee Splits 18.3 Permissible Services, Ownership Returns and Marketing Agreements
19 19. Mortgage Servicing
19.1 Escrow, Servicing Errors and Force-Placed Insurance 19.2 Early Intervention, Continuity of Contact and Loss Mitigation
20 20. Consumer Reports and Credit Decisions
20.1 Consumer Reports: Permissible Purpose and Employment Use 20.2 FCRA Adverse Action Notices and Credit Score Disclosures 20.3 Risk-Based Pricing and Furnisher Accuracy Duties
21 21. Furnishing, Medical Information and Identity Theft
21.1 Negative Information Notices and Furnisher Disputes 21.2 Medical information in credit decisions: Regulation FF and V 21.3 Identity Theft Program Scope, Governance and Detection
22 22. Identity Theft and Debt Collection
22.1 Red Flag Responses, Program Updates and Address Validation 22.2 Debt Collector Scope, Calls and Communication Limits 22.3 Electronic Collection Messages and Validation Disputes
23 23. SCRA Protections and MLA Coverage
23.1 SCRA Eligibility and the Six-Percent Interest Cap 23.2 SCRA Foreclosure, Repossession, Leases and Waivers 23.3 MLA Borrowers, Identification and Credit Exemptions
24 24. Military Credit and Consumer Communications
24.1 MAPR, Military Disclosures and Prohibited Credit Terms 24.2 TCPA Calling Technology, Consent and Do-Not-Call Rules 24.3 Telephone Enforcement, TSR Coverage and Commercial Email
25 25. Electronic Consent and Consumer Leasing
25.1 E-SIGN Consent and Consumer Electronic Records 25.2 Consumer Leasing Coverage, Disclosures and Residual Value
26 26. Deposit Insurance and Privacy Notices
26.1 FDIC Insurance: Single, Joint and Trust Ownership 26.2 Retirement, Business and Custodial Insurance; FDIC Signs 26.3 Privacy Notices, Sharing and Opt-Out Opportunities
27 27. Privacy Sharing and Information Security
27.1 Privacy Sharing Exceptions, Account Numbers and Reuse 27.2 Information Security Programs and Incident Investigation 27.3 Customer Incident Notices and Regulatory Notification Clocks
28 28. Authentication and Specialized Data Privacy
28.1 Authentication, access and layered security 28.2 GDPR scope, lawful processing and incident response 28.3 HIPAA and HITECH in bank services
29 29. Insider Lending and Affiliate Definitions
29.1 Regulation O Insider Definitions and Nonpreferential Credit 29.2 Insider Approvals, Lending Limits and Executive Restrictions 29.3 Affiliate Definitions, Covered Transactions and Collateral
30 30. Affiliate Transactions, Appraisals and Originators
30.1 Low-Quality Assets, Market Terms and Affiliate Limits 30.2 Title XI Valuation Thresholds, Exemptions and Credentials 30.3 Valuation Independence, HPML Appraisals and SAFE Registration
31 31. Garnishment and Financial Records
31.1 Federal Benefit Garnishment: Review, Protection and Notice 31.2 Financial Privacy: Government Requests, Certificates and Exceptions 31.3 Regulation S and financial-record reimbursement
32 32. Bank Security and Insurance Sales
32.1 Bank Bribery and Physical Security Programs 32.2 Security Reporting and Retail Nondeposit Investments 32.3 Consumer protection in bank insurance sales
33 33. Securities Activities and Anti-Bribery Rules
33.1 Regulation R and bank brokerage exceptions 33.2 Regulation U purpose credit and margin collateral 33.3 FIRREA civil penalties and foreign bribery risks
34 34. Payment Systems, Child Privacy and Tax Reporting
34.1 Deposit Classification, Reserve Ratios and Debit Interchange 34.2 Internet Gambling Controls, Child Privacy and Email Rules 34.3 IRS information reporting and backup withholding
35 35. Accessible Banking
35.1 ADA Title III and access to banking services
36 36. CMS Governance and Operating Procedures
36.1 Board of Directors & Senior Management Oversight: Responsibilities, Culture & Resources 36.2 The Three Lines of Defense Model in Bank Compliance 36.3 Compliance Policies and Procedures: Development, Approval Cycles & Operationalization
37 37. Compliance Risk Assessment
37.1 Compliance Risk Assessment: Exposure and Control Evidence 37.2 Residual Risk, Specialized Reviews and Event-Driven Updates 37.3 Risk Scoring, Impact Dimensions and Risk Appetite
38 38. Risk Indicators and Compliance Training
38.1 Compliance Indicators, Emerging Risks and Model Limits 38.2 Legal Training Duties and Role-Based Curriculum 38.3 Board Education, Training Administration and Effectiveness
39 39. Monitoring, Testing and Vendor Diligence
39.1 Monitoring, Independent Assurance and Risk-Based Scoping 39.2 Sampling Objectives, Workpapers and Testing Reports 39.3 Third-Party Planning, Diligence and Contract Design
40 40. Vendor Controls and Complaint Management
40.1 Vendor Monitoring, Fintech Controls and Service-Company Notices 40.2 Complaint Intake, Investigation and Root Cause 40.3 Complaint Reporting, Agency Responses and Systemic Redress
41 41. Regulatory Change and Corrective Planning
41.1 Regulatory Surveillance, Impact Assessment and Gap Analysis 41.2 Change Implementation, Validation and Judicial Stays 41.3 Issue Prioritization, Root Cause and Corrective Plan Design
42 42. Restitution and Examination Management
42.1 Remediation Populations, Restitution and Closure Evidence 42.2 Examination Coordination and Consumer Compliance Ratings 42.3 Supervisory Findings, Responses and Enforceable Actions
43 43. Regulatory Reports and Resubmissions
43.1 Regulatory reporting, corrections and examiner updates
18.2 RESPA Coverage, Referral Payments and Fee Splits
Key Takeaways Explain This Topic AI
RESPA Section 8 prohibits referral compensation involving covered settlement services.
An unearned fee split is analytically distinct from a referral kickback.
Business-purpose and other coverage exclusions must be established before applying the prohibition.
Last updated: October 2026
Statutory Scope and Federally Related Mortgage Loans
RESPA and Regulation X apply to federally related mortgage loans secured by a first or subordinate lien on 1-to-4 family residential real property (12 CFR § 1024.2(b)). Covered properties include individual single-family homes, condominiums, cooperative housing units, manufactured homes, and 2-to-4 unit residential buildings.
Statutory and Regulatory Exemptions (12 CFR § 1024.5(b))
Compliance officers must distinguish covered residential mortgage transactions from transactions expressly excluded from RESPA:
Business, Commercial, or Agricultural Purpose Loans: Any loan extended primarily for a business, commercial, or agricultural purpose—as defined under Truth in Lending Act Regulation Z (12 CFR § 1026.3(a))—is completely exempt from RESPA, regardless of whether the loan is secured by residential real estate.
Acreage: The old 25-acre exemption was removed; acreage alone is not a current RESPA exemption.
Temporary Financing: Genuine temporary construction, bridge or swing financing, subject to § 1024.5’s exceptions, including construction financing used as permanent financing or to finance transfer to the first user; loans financing construction for sale to the first user are not automatically exempt.
Vacant Land: Loans secured by vacant or unimproved real property, provided that none of the loan proceeds will be used to construct a 1-to-4 family residential dwelling within two years of loan settlement.
Loan Assumptions and Secondary Market Sales: Assumptions of existing mortgages without lender approval, and bona fide secondary market sales of whole loans or mortgage-backed securities.
Section 8(a): Prohibitions on Kickbacks and Referral Fees (12 CFR § 1024.14(b))
Under 12 CFR § 1024.14(b), "No person shall give and no person shall accept any fee, kickback, or other thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or a part of a settlement service involving a federally related mortgage loan shall be referred to any person."
The Three Elements of a Section 8(a) Violation
A completed violation of Section 8(a) requires three cumulative legal elements:
An Agreement or Understanding: May be verbal, written, or implied by an established course of dealing or pattern of conduct. A formal contract is not required; an unwritten understanding that loan referrals will be rewarded with gifts, dinners, or subsidized office space satisfies this element.
A Referral: Any oral, written, or electronic action directed to a person that has the effect of affirmatively influencing the selection by any person of a provider of a settlement service.
A Thing of Value: Defined under 12 CFR § 1024.14(d) with expansive statutory breadth.
Broad Statutory Definition of "Thing of Value" (§ 1024.14(d))
A thing of value is not limited to cash payments. It encompasses virtually any financial benefit, including:
- Direct cash payments, commissions, fees, or profit splits;
- Discounts, salary advances, or gift cards;
- Tickets to sporting events, concerts, or theatrical performances;
- Sponsored vacations, trips, golf outings, or lavish meals;
- Desk space, office leases, or facility rentals paid at above-fair-market-value rates;
- Free or subsidized administrative, clerical, or marketing services provided to a referring party;
- Reductions in interest rates, loan origination fees, or closing costs conditioned on referrals;
Leads or customer contact lists provided without fair market value compensation.
Settlement Services Defined (12 CFR § 1024.2)
Settlement services encompass any service provided in connection with a real estate settlement, including title searches, title examinations, title insurance commitments and policies, property surveys, attorney services, credit reports, property appraisals, home inspections, mortgage loan origination and processing, underwriting, mortgage brokering, loan document preparation, escrow and closing management, hazard insurance, and flood certification.
Section 8(b): Splitting Charges and Unearned Fees (12 CFR § 1024.14(c))
Under 12 CFR § 1024.14(c), "No person shall give and no person shall accept any portion, split, or percentage of any charge made or received for the rendering of a settlement service in connection with a transaction involving a federally related mortgage loan other than for services actually performed."
Prohibition on Markups and Unearned Charges
Section 8(b) outlaws the practice of splitting settlement fees with third parties who perform no actual settlement services. For example, if a settlement agent charges a consumer $200 for a title search conducted by a third-party title abstractor who only billed $75, and splits the remaining $125 with a referring real estate broker, both the settlement agent and the broker violate Section 8(b).
The Supreme Court's Freeman v. Quicken Loans Precedent
In Freeman v. Quicken Loans, Inc. , 566 U.S. 624 (2012), the Supreme Court ruled that Section 8(b) is not a general price-control statute and requires a fee split between two or more persons . An undivided unearned fee (e.g., a single lender charging a $500 document preparation fee without performing separate work, but keeping the entire fee without splitting it) does not violate RESPA Section 8(b). However, the CFPB and federal prudential regulators routinely prosecute unilateral fee markups and phantom settlement fees under Dodd-Frank Section 1036 UDAAP authority as unfair or deceptive practices.
Section 8(c): Permissible Payments and Safe Harbors (12 CFR § 1024.14(g))
Section 8(c) outlines statutory safe harbors where payments between settlement service providers are legally permissible:
Bona Fide Compensation: Payments of bona fide salary, compensation, or other payments for goods or facilities actually furnished or services actually performed;
Attorney Fees: Payments to an attorney for services actually rendered in connection with loan closing;
Title Agent Compensation: Payments by a title company to its duly appointed agent for services actually performed in the issuance of a title insurance policy;
Lender Agent Compensation: Payments by a lender to its agent for services actually performed in loan origination;
Cooperative Brokerage Arrangements: Cooperative brokerage and referral arrangements between licensed real estate brokers (e.g., traditional broker-to-broker referral commissions).