The real estate industry won a major referral-law victory in court this week when a federal appeals court shot down a controversial Sec. 8 anti-kickback enforcement action taken by the Consumer Financial Protection Bureau last year.

In a decision that aligns with arguments by NAR and other industry groups, the court said the CFPB incorrectly levied a $109 million fine on a mortgage company, PHH Corp., for entering into an arrangement with mortgage insurers to refer customers to them if they bought reinsurance from PHH-affiliated reinsurers.

At the time it handed down the fine, the CFPB said the “tying” arrangement between the companies amounted to an illegal referral arrangement under Sec. 8(c)(2) of the Real Estate Settlement and Procedures Act. Sec. 8 prohibits payments of anything of value for referrals of business in connection with real estate settlements. Visit REALTOR Magazine