Marketing Services Agreement Cfpb

Are you currently in the process of negotiating a marketing services agreement (MSA) between your company and a third-party service provider? If so, it`s important to be aware of the guidelines put forth by the Consumer Financial Protection Bureau (CFPB).

The CFPB has released a set of recommendations for MSAs, which are contracts between a mortgage company and a third-party provider that outlines marketing services to be provided. The bureau`s guidelines aim to ensure that these agreements are transparent and fair to the consumer.

First and foremost, the CFPB recommends that MSAs clearly define the services being provided and the compensation terms. It`s important to specify what marketing services will be provided and how the third-party provider will be compensated for these services, whether it`s a flat fee or a percentage of profits.

Additionally, the CFPB advises that MSAs should be structured to avoid financial incentives for the mortgage company to refer business to the third-party provider. This means that compensation should be based on the actual marketing services provided, not on the volume or value of business generated.

Another important consideration is disclosure. The CFPB recommends that mortgage companies disclose the MSA to consumers and provide a clear explanation of how the third-party provider is compensated. This helps ensure that consumers are fully informed about the nature of the relationship between the mortgage company and the third-party provider.

It`s worth noting that failure to comply with these guidelines can result in penalties and legal action from the CFPB. In recent years, the bureau has taken action against several mortgage companies for alleged violations of MSA regulations.

In conclusion, if you`re in the process of negotiating an MSA, it`s crucial to be aware of the CFPB`s guidelines. By ensuring that your agreement is transparent and fair to consumers, you can avoid potential legal issues and build a stronger, more ethical business relationship with your third-party provider.