Many lenders believe that the key to a compliant marketing services agreement is the proper formation of such a relationship. While the importance of a proper monetary valuation and appropriate contract cannot be understated, the mistake many lenders make is to focus exclusively on these issues.
Indeed, when regulators evaluate MSA agreements from the perspective of potential RESPA violations, one of the things they most closely examine is the extent to which a lender's behavior is consistent with the payment being for the services rendered under the MSA.
For instance, if a lender is paying for the distribution of certain promotional literature, does lender provide the promotional materials to the MSA partner? Does the lender confirm that the promotional materials are being distributed? Does the lender check the volume of distributions to determine the benefit of the marketing expense?
All too often, lenders focusing primarily on the formation of the relationship forget that the behavior that follows can fully undermine even the best contracts and MSA formation strategies.
The lesson learned is that an MSA relationship is not about a good formation strategy and then businesses usual. It is an ongoing relationship that must be monitored to demonstrate that the intent of any payments are consistent with those set forth in the MSA formation contracts.