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I listen to Managing a Winning and Compliant Marketing Program yesterday and I had two follow up questions for Rebekah. Our marketing team has requested to do the following.
1.Are there any compliance issues with doing “small business spotlight” for businesses in our community on our Facebook page? Basically a Facebook post highlighting a business in our community each month with their consent.2.Can we offer a rebate to a customer for signing up for e-statements? Example, $10 if a customer signs up to get electronic statements instead of getting a mailed copy.
Thank you!
Response from Rebekah Leonard:
1.Are there any compliance issues with doing “small business spotlight” for businesses in our community on our Facebook page? Basically a Facebook post highlighting a business in our community each month with their consent.
For any business that does not provide mortgage settlement services, there are no concerns, as since you are obtaining the business owner’s consent.
However, for mortgage settlement service providers (think title companies, realtors, brokers, attorneys, appraisers, inspectors, insurers, etc.), things are murkier. RESPA Section 8 issues to consider:
– The “spotlight” exposure is free advertising for the business. As such, it is a thing of value, and it cannot be given in exchange for any referral. To steer clear of this, ask if all three of these things are present:
o A thing of value: Yes
o An agreement or understanding: Yes (the business is consenting to the FB spotlight)
o A referral. Here’s the tricky one. You must make sure there is no explicit or implied expectation that the company will refer business to your bank because you featured them in the spotlight.– Applicability of MSA rules. Marketing Services Agreements (MSAs) are agreements that involve an arrangement where one entity agrees to market or promote the services of another and receives compensation in return. (See the RESPA FAQ starting on page 176 of my manual.) If you are not receiving any compensation (think about “compensation” broadly here) for the spotlight, then you do not have an MSA and do not need to consider the rules for it.
In short, you have a risk decision to make. The most conservative approach is to simply not spotlight a business that provides settlement services. That avoids the RESPA landmine altogether. However, if you wish to do so, I suggest you broadly spotlight many different companies for free (to reinforce that there is no favoritism shown for any particular settlement service provider), and for those providing settlement services, make sure everyone is very well aware that there are no referral strings attached.2.Can we offer a rebate to a customer for signing up for e-statements? Example, $10 if a customer signs up to get electronic statements instead of getting a mailed copy.
Yes! Paying a $10 (or more!) bonus as an incentive for e-statement enrollment is not a Reg DD “bonus” in any way. 1030.2(f) defines a bonus as a “premium, gift, award, or other consideration worth more than $10 (whether in the form of cash, credit, merchandise, or any equivalent) given or offered to a consumer during a year in exchange for opening, maintaining, renewing, or increasing an account balance.” E-statement enrollment does not involve any of these things. Neither Reg DD’s bonus rules nor IRS interest reporting rules apply.
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