BrokerageIndustry News

No more MSAs: Colorado boldly goes where CFPB has yet to tread

State insurance division passes regulation prohibiting title insurance providers from entering into MSAs with real estate and other settlement service partners
  • Colorado passed the new rule due to lack of clear direction from the CFPB.
  • In 2014 the CFPB said that MSA contracts themselves are "a thing of value," which had a chilling effect on MSAs nationwide.
  • The new regulation defines what is and is not permissible for title insurance providers in Colorado.

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The state of Colorado has the real estate and settlement services’ industries number when it comes to the controversial topic of marketing service agreements (MSAs), and it’s 8-1-3. That’s the title of a Colorado Division of Insurance (CDOI) proposed rule that passed on Aug. 16, effectively banning MSAs between title insurance providers and their real estate and other settlement service partners in Colorado. It’s an extraordinary stance for a state to take, as the federal Consumer Financial Protection Bureau’s (CFPB) broad application of the Real Estate Settlement Procedures Act (RESPA) continues to create enough national confusion that large players like Wells Fargo have put down their cards and walked away from the MSA game entirely. Acting because the CFPB hasn't Although the CDOI has been working for at least three years to make other key revisions to its title insurance regulations, the division didn’t act alone in enacting 8-1-3; it may surprise some to learn...