[tcranshaw]

Our Retail Division would like to partner with our business customers (example: home builders, home remodelers, etc.) for the Bank to be a source of financing to their customers. I’m being informed that this is a partnership with our customer and that our customer is not receiving anything of value in this scenario.

While I understand the definition of “thing of value” is broad, to me this scenario falls under “opportunity to participate in a money-making program” i.e. we provide the financing for the improvements the builder/remodeler makes money.

I appreciate any thoughts you may have on this matter.

Topic

[jholzknecht]

You have provided enough information to scare me, but not enough to determine if there is a problem or not. Your bank is forming partnerships with home builders and others. A partnership is a legal agreement under which, among other items, profits are split. Very likely such an arrangement would qualify as an Affiliated Business Arrangement. You need to get a full understanding of all of the details of the arrangement. If the builder refers those who need financing to your bank and your bank in return provides the builder a “thing of value” you have all of the elements of a Section 8 violation. If the builders simply make uncompensated referrals you should be fine.

Provide us with more details and we can better assist you in determining if there is a violation or not.

[Author]

Replies