Colorado Bans MSAs for Title Companies

Colorado Bans MSAs for Title Companies

Marketing service agreements (MSAs) are banned in Colorado, according to The Title Report. That went into effect Monday, Aug. 15.

"The Colorado Division of Insurance has banned MSAs between title entities and settlement producers," RESPA News reported.

Colorado's ban seems to add to the uncertainty of MSAs.

That uncertainty caused some companies to move away from entering MSAs altogether. Last year, Wells Fargo announced its withdrawal from MSAs.

"The decision was made as a result of increasing uncertainty surrounding regulatory oversight of these types of arrangements and as part of Wells Fargo’s ongoing efforts to simplify the process that customers experience as they weigh all of their choices when shopping for a mortgage," Wells Fargo said in a statement.

The Title Report cited a bulletin from the Consumer Financial Protection Bureau (CFPB) that was posted last October.

In the statement, the CFPB explained its "concern" and provided guidelines on MSAs for companies. The organization aimed the bulletin at the mortgage industry. But, the guidelines serve as a good resource to any company thinking about MSAs.

"The bulletin explains that while marketing services agreements are usually framed as payments for advertising or promotional services, in some cases the payments are actually disguised compensation for referrals," the CFPB wrote. "Any agreement that entails exchanging a thing of value for referrals of settlement service business likely violates federal law, regardless of whether a marketing services agreement is part of the transaction."

You can find the bulletin here.

When we have more information, we will update this post. Follow our blog for updates.


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