The Consumer Financial Protection Bureau (CFPB) issued its first appellate decision. Because the CFPB supervises banks, credit unions, and financial companies its operations can have an impact on both the corporate and the real estate worlds. This case in particular has broad implications for those affected by the Real Estate Settlement Procedures Act (RESPA).
What is RESPA?
RESPA is a law designed to make sure consumers are provided with certain information about the cost of mortgage settlement and that they are protected from overly high settlement charges that can in some circumstances be considered the result of abusive practices. The law was created because decades ago companies involved with the buying and selling of real estate were engaging in undisclosed kickbacks to one another. This increased the costs of real estate transactions and negatively impacted competition. The law used to be enforced by the Department of Housing and Urban Development, but a few years ago the government transferred the enforcement authority to the CFPB.