Legal Blog

Compensation and Compliance Matters: CFPB Disregards Employment Classification to Find Kickbacks

Last week the Consumer Financial Protection Bureau announced another enforcement action aimed at “kickbacks” prohibited by the Real Estate Settlement Procedures Act. This time, it was a title company that had received referrals of title business from independent sales agents. What is particularly interesting about the CFPB’s actions in this case, are that it recognized a distinction in terms of the treatment of persons working for a company based upon their classification as employees or contractors. Although it is clear that employees can receive referral payments under RESPA, there was a lack of clarity in the case of “independent contractors” who performed nearly the same services but were simply designated as stand-alone companies. Although some believed that this differentiated tax treatment would not necessarily matter as to kickbacks if the services were similar to those of employees, it appears from the CFPB’s actions, that the statute—which says “employees”—will be strictly construed. Click here to view the entire article click here. If you have any questions about please contact Ari Karen at: Bank Manager Reimbursementsakaren@offitkurman.com  | 240.507.1740 Ari Karen is an experienced litigator and speaker who has focused his practice in representing financial institutions in both government investigations and litigation before state and federal trial and appellate courts nationwide. Mr. Karen’s practice is diverse, representing clients on matters concerning banking regulations, Dodd Frank financial reform laws, contractual disputes, employment and labor statutes, wage-hour class actions, employment discrimination and fair lending matters, whistleblower complaints and non-competition claims, among others. You can also connect with Offit Kurman via FacebookTwitterGoogle+YouTube, and LinkedIn.