+--------+---+---------------------------+--------+-------------------+---+
| # O    | # |                           |        |                   | # |
|        | # |                           |        |                   |   |
| ##     | # |                           |        |                   |   |
|        | # |                           |        |                   | # |
|        |   |                           |        |                   |   |
|        | O |                           |        |                   |   |
|        | C |                           |        |                   | # |
|        | C |                           |        |                   | # |
|        |   |                           |        |                   |   |
|        | 2 |                           |        |                   |   |
|        | 0 |                           |        |                   |   |
|        | 0 |                           |        |                   |   |
|        | 5 |                           |        |                   |   |
|        | - |                           |        |                   |   |
|        | 2 |                           |        |                   |   |
|        | 7 |                           |        |                   |   |
+--------+---+---------------------------+--------+-------------------+---+
|        | * |                           |        |                   |   |
|        | * |                           |        |                   |   |
|        | O |                           |        |                   |   |
|        | C |                           |        |                   |   |
|        | C |                           |        |                   |   |
|        | B |                           |        |                   |   |
|        | U |                           |        |                   |   |
|        | L |                           |        |                   |   |
|        | L |                           |        |                   |   |
|        | E |                           |        |                   |   |
|        | T |                           |        |                   |   |
|        | I |                           |        |                   |   |
|        | N |                           |        |                   |   |
|        | * |                           |        |                   |   |
|        | * |                           |        |                   |   |
+--------+---+---------------------------+--------+-------------------+---+
| ## Com |   |                           |        |                   |   |
| ptroll |   |                           |        |                   |   |
| er of  |   |                           |        |                   |   |
| the Cu |   |                           |        |                   |   |
| rrency |   |                           |        |                   |   |
|        |   |                           |        |                   |   |
| > A    |   |                           |        |                   |   |
| dminis |   |                           |        |                   |   |
| trator |   |                           |        |                   |   |
| > of   |   |                           |        |                   |   |
| > Na   |   |                           |        |                   |   |
| tional |   |                           |        |                   |   |
| >      |   |                           |        |                   |   |
|  Banks |   |                           |        |                   |   |
+--------+---+---------------------------+--------+-------------------+---+
| ## Su  |   | ## Real Estate            | ##     | ## Sha            |   |
| bject: |   | Settlement Procedures Act | Descri | m Controlled Busi |   |
|        |   |                           | ption: | ness Arrangements |   |
+--------+---+---------------------------+--------+-------------------+---+

**TO:** Chief Executive Officers and Compliance Officers of All National
Banks, Department and Division Heads, and All Examining Personnel

The Office of the Comptroller of the Currency (OCC) has noted that third
parties have approached some national banks to form affiliated business
arrangements (ABAs) to offer real estate settlement services. National
banks that choose to enter into ABAs with third parties must ensure that
such arrangements comply with section 8 (12 USC 2607) of the Real Estate
Settlement Procedures Act (RESPA). This bulletin is being issued to
remind you of the Department of Housing and Urban Development's (HUD)
1996 policy statement on "Sham Controlled Business Arrangements," now
known as affiliated business arrangements. Although the name of the
business arrangements has changed, HUD continues to stand behind its
interpretation of section 8 of RESPA, as explained in the policy
statement. The OCC transmitted HUD's policy statement in 1996 as an
attachment to OCC Bulletin 96-41. The OCC is redistributing the policy
statement with this bulletin.

HUD's policy statement contains 10 factors that will be considered in
determining whether an affiliated business entity is a bona fide
provider of settlement services. The policy statement also provides
guidance for assessing whether payments to a third party are for
services rendered and yield an acceptable return on ownership interest,
or are for an illegal payment for the referral of settlement service
business.

Due to the substantial penalties and liabilities provided in 12 USC
2607(d), national banks that have formed, or plan to form ABAs with
third parties to perform real estate settlement services, should
carefully review HUD's policy statement and ensure that the structure,
operating agreement, and activities of these entities do not violate
section 8 of RESPA. Banks seeking to provide real estate settlement
services through operating subsidiaries or noncontrolling investments
also should review guidance in the OCC's Licensing Manual, Investment in
Subsidiaries and Equities (12 CFR 5.34(e)(5)(v)(V)).

Questions regarding this bulletin may be directed to the Compliance
Policy Department at (202) 874- 4428 or the Community and Consumer Law
Division at (202) 874-5750.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Ann F. Jaedicke

Deputy Comptroller for Compliance Policy

Attachment: [61 FR
29258](http://www.occ.treas.gov/fr/fedregister/61fr29258.pdf)

\[http://www.occ.treas.gov/fr/fedregister/61fr29258.pdf\]