Ed. #35:Ted Lasso, Intent and RESPA Narrative

September 12, 2021|CFPB, Marketing & Sales, RESPA

"Living in the moment is a gift. That’s why they call it the present." — Ted Lasso (on Twitter)

Ted Lasso=Ned Flanders?

If you haven’t been following Ted Lasso on Apple TV+you are missing one of the best shows on right now. Meanwhile, Ned Flanders, the annoyingly cheery and well-mannered neighbor of Homer Simpson, now has a pedestrian bridge in Portland, Oregon named after him[1]. I mention that about the bridge, not just to show how Portland owns its weirdness[2], but also because Ted Lasso is pretty much Ned Flanders’ doppelganger (right down to the creepy bushy mustache)[3].

Every character on Ted Lasso is flawed in some way, but eventually seems to find redemption. The show is about kindness, gratitude and forgiveness, and it is uplifting while also being laugh-out-loud funny without creating political divisions as so many current attempts at humor do. If you’re like me, however, with an ear for the English language hard-wired in the Upper Midwest[4], a show about an American football coach working in England coaching a professional soccer team, requires subtitles to understand what those bloody Brits are saying half the time.

Words, Meaning and Motivation

Speaking of speaking English, when did Brits adopt the word/sound “Oi”? Apparently, that’s their version of “Hey!”, to get someone’s attention. My grandparents used to say the similar sounding “Oy”[5]to respond to something mildly awful, but not only is that spelled differently, you’d never use that just to get someone’s attention.

Meanwhile, sometimes our words don’t even mean what they say. The fans of the movie, The Princess Bride[6]will recall Wesley, the farm boy, who becomes the dread pirate Roberts, saying over and again, “As you wish..”, to a young Princess Buttercup. Yet, the young princess eventually recognized that was not his true meaning. So, it’s really the intent behind the words that matters. Similarly, when I asked my high school aged kid a few years ago why chanting “U.S.A.” was forbidden under Wisconsin’s high school sports anti-taunting rule, they said, “Dad, you’re a moron[7]. The other kids aren’t saying ‘USA’ because they’re patriotic. It actually means: ‘you suck ass’.” That’s definitely not a Ted Lasso endorsed cheer[8]but, yeah, motivation matters.

What’s your (RESPA) motivation?

Some of you may remember that Brady Bunch episode[9]where Greg Brady wanted everyone to “live by exact words”? That didn’t turn out so good for Greg because he got grounded, his date ended up with his brother’s frog on her head, and even worse he had to wear the ugliest early 70’s era shirts ever[10]. Does that prove anything? Not at all, but it sets up the discussion I’ve had many times in RESPA training classes about the importance of intent and motivation to having a compliant RESPA narrative.

Why am I spending so much time trying to convince you that motivation matters? Because compliance with RESPA isn’t about living by “exact words” either. It’s what actually occurs that matters, and your intent is entirely relevant to that inquiry. Unlike prescriptive compliance rules like TRID or HMDA that spell out in detail what you are required to do, RESPA’s Section 8-anti-kickback provisions just tell you what you can’t do. Specifically, you can’t give or receive a thing of value in return for referrals of settlement services.

So, RESPA legal nerds like me spend a lot of time explaining to settlement service folks why even when you don’t do exactly what RESPA says you can’t, that your intent and motivation still matter. For example, CFPB’s October 2020 RESPA FAQs said MSAs could be legal, but if they are really a disguised agreement to pay for referrals that they aren’t legal. Unfortunately, CFPB doesn’t tell you how or why they might find a disguised agreement to pay referrals in an MSA. But, if you ask me what distinguishes a legal MSA from a disguised referral arrangement, the answer is intent. If your intent with an MSA was to promote your brand, services and identity by marketing with a referral source, great. If your motivation was to find a way to compensate a referral source for referrals, on the other hand, not so great.

My favorite example of intent-Lunch

Let’s say you want to take a referral source to lunch. Is that a RESPA violation? Before I answer, first tell me why you are taking that person to lunch. Is your motivation for the lunch: (i) a “thanks for the business” affair, or (ii) an opportunity to market your products and services and build a relationship? If you said “(i) it’s a thank you”, you just admitted to a RESPA violation. If you said, “(ii) marketing opportunity” (and the amount for the lunch was reasonable), you had a compliant lunch. It’s the same darn lunch, but your motivation/intent is what drives the RESPA compliance[11].

The same holds true for all RESPA sensitive relationships from MSAs and desk leases, to employment relationships, co-marketing, lead sharing and even joint ventures. If your intent or motivation is to compensate someone for referrals, you are going to destroy even the best legal documents that set up a compliant structure: either through other disconfirming communications or noncompliant administration of the agreement.

You can hear more from me about intent and a compliant RESPA narrative this fall at the MBA’s Legal and Regulatory Conference in DC on Tuesday morning September 14, 2021. I also plan to illustrate compliant RESPA narratives at RESPRO’s Fall Conference in Scottsdale Arizona, October 4-6, where another semi-famous mustached man (patterned off Dr. Rick of the Progressive Insurance commercials) will help me explain.

“You know, I always thought that tea was going to taste like hot brown water, and you know what? I was right. It’s horrible.” — Ted Lasso

[1]Also, hey Portland, Ned’s catch phrase is actually “Okily Dokily Doo”. It’s not whatever slogan engraved in bronze on that pedestrian bridge. Doh!

[2]Speaking of bronze, Milwaukee owns its weirdness too, I guess. I mean we have the Bronze Fonz.

[3]I’m not the first person to make that connection.

[4] Don’t cha know.

[5] Or “Oy vay” if it was really awful

[6]Princess Bride fans who read this blog will also recall my Musings #11.

[7]This was not really important to the story, nor has their opinion changed.

[8]Neither is this.

[9] Some of you may also remember some other Brady Bunch references in Musings #9.

[10] Ugly was pretty much the standard Brady Bunch apparel.

[11]Of course, the answer is both (i) and (ii), but why muddy a perfectly clean illustration.