Section 3500.14 of RESPA Regulations (HUD Regulation X) contains an exemption which allows for free marketing and educational activities but specifically excludes classes for continuing education credit. It reads as follows:
g) Fees, salaries, compensation, or other payments. (1) Section 8 of RESPA permits: (vi) Normal promotional and educational activities that are not conditioned on the referral of business and do not involve the defraying of expenses that otherwise would be incurred by persons in a position to refer settlement services or business incident thereto;
In other words, it is permissible if the educational activity does not defray an expense that a real estate licensee would otherwise incur. Since licensees are required to take continuing education classes the exemption does not apply and RESPA is violated.
NAR also counsels against providing free CE classes: 7. Q. Is it legal for Affiliate Members who are settlement service providers to sponsor continuing education or new-member orientation classes?
A. It depends on whether some of the expenses an agent would otherwise bear are defrayed by the affiliate member. In the case of an orientation course there is probably no problem because new members pay an application fee which is the same whether an affiliate sponsors the course or not. If the affiliate is simply recognized as a sponsor it is similar to an affiliate running an ad in the association paper and would be considered normal marketing activity. Sponsorship of continuing education is more likely to be a violation because members normally have to pay a fee to attend such programs. If the cost of the course is underwritten by the affiliate so that the agents need not pay fees that they otherwise would have to pay, such sponsorship could be interpreted as a thing of value received by the agent for RESPA purposes.