A win for the consumer
We’d like to applaud Wells Fargo for announcing a move toward eliminating their role in the ABA/CBA marketplace. The bank announced last week that it would discontinue 8 joint ventures, according to a report in American Banker.
We’ve repeatedly exposed the truth behind the legal kickback known as the Affiliated Business Arrangements (also known as a Controlled Business Arrangement or CBA), so it’s nice to see a big player in the game is moving away from this inherently anti-consumer model.
A spokesman for Wells Fargo cited increased regulatory pressure by the Consumer Financial Protection Bureau (CFPB) as the reason for its decision to exit the arrangements. Recently, the CFPB has stepped up its scrutiny of these ethically and legally-challenged arrangements, recognizing that consumers are footing the bill for an arrangement that, most of the time, is nothing more than a conduit for illegal payments for the referral of business.
Perhaps Wells Fargo’s honorable and pragmatic decision to stop the kickbacks will inspire other major mortgage-related players to bow out of the kickback game as well.