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Marketing Servicing Agreements

Answered by: 
Dan Persfull

Question: 
Is anyone out there doing Marketing Servicing Agreements with builders? We've had some builders approach us and want us to pay them $500/month for the privilege of putting our logo on their ads and my RE department says other banks are doing this. I think it would be a RESPA violation if you cannot prove the $500 is the actual cost of the bank's portion of the ad. If anyone is participating in this, I'd like to know how they got around the RESPA requirements.
Answer: 

If you are paying for the advertisement there is no Sec 8 problem. I think it would be a RESPA violation if you cannot prove the $500 is the actual cost of the bank's portion of the ad.

You're not creating the ad nor partnering with the builder in the ad. The builder is simply charging you, and any one else, $500 for the "privilege" of placing your logo in their promotional materials. You are simply purchasing an advertisement. I would think this would be the same as you purchasing any other advertising space in promotional materials. If you and the builder were going into a joint advertising campaign then I would say you would have to be able to show you are paying the bank's proportionate share of the advertisement.

First published on BankersOnline.com 3/16/09

First published on 03/16/2009

Filed under: 
Operations
Filed under operations as: 
IT
RESPA

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