## Facts

- Homebuyers sued a real estate brokerage and related title entities alleging illegal referral-fee arrangements in violation of RESPA § 8(a), 12 U.S.C. § 2607(a).
- The brokerage referred buyers to an affiliated title agency that was jointly owned by a Welles-Bowen-related holding structure and a title company; the affiliated agency contracted out much of the title work to the co-owner title company.
- Defendants relied on RESPA’s “affiliated business arrangement” safe harbor in § 8(c)(4), 12 U.S.C. § 2607(c)(4).
- The parties did not dispute that the arrangement satisfied the statute’s three express safe-harbor conditions: required disclosure, no required use of the affiliate, and no thing of value other than a return on ownership interest.
- Plaintiffs argued the arrangement was a sham and invoked a HUD policy statement that purported to add a “bona fide provider of settlement services” requirement beyond the statute.
- The district court granted summary judgment for defendants, concluding the statutory safe harbor applied and HUD’s policy statement could not add binding conditions.
- The United States intervened on appeal to defend HUD’s position and argue for Chevron deference to the policy statement.

## Issues

1. Whether RESPA § 8(c)(4)’s affiliated-business safe harbor includes an additional “bona fide provider” requirement stated only in a HUD policy statement.
2. Whether HUD’s policy statement is binding or entitled to Chevron or Skidmore deference such that it can effectively narrow the statutory safe harbor.

## Decision

- The Sixth Circuit affirmed summary judgment for defendants.
- Because defendants met § 8(c)(4)’s three textual conditions, they qualified for the statutory safe harbor.
- The HUD policy statement was not binding, lacked force of law, and was not entitled to Chevron deference.
- The policy statement also lacked sufficient persuasive weight under Skidmore to justify adding extra-textual conditions that conflict with the statute’s clear safe-harbor terms.
- Plaintiffs’ RESPA § 8(a) claims failed because the challenged referrals fell within the safe harbor as written.

## Legal Principles

- When a statute sets out specific prerequisites for a safe harbor, courts apply those prerequisites as written; agencies may not add conditions through nonbinding guidance.
- Chevron deference generally applies only to agency interpretations carrying the force of law (typically via notice-and-comment rulemaking or formal adjudication), not to policy statements.
- Skidmore weight depends on persuasiveness; guidance that effectively rewrites clear statutory text warrants little or no weight.
- In statutory schemes with potential criminal exposure, narrowing a statutory safe harbor through sub-regulatory guidance is especially disfavored because it can expand liability without legislative action.

## Conclusion

The Sixth Circuit held that RESPA’s affiliated-business safe harbor turns on the statute’s three express conditions and cannot be narrowed by HUD’s nonbinding policy statement; because defendants satisfied the statutory requirements, the court affirmed judgment in their favor.


Carter v. Welles-Bowen Realty, Inc., 736 F.3d 722 (6th Cir. 2013)