In January 1993, the Independent Bankers Association of America asked the government to decide whether a feature of its mortgage banking program met the standards of the Real Estate Settlement Procedures Act, or RESPA.

The issue seemed simple enough. Participating banks prepared mortgage applications for customers and received a small fee from the trade group's mortgage banking firm, PHH US Mortgage, Cherry Hill, N.J. The question was whether the fee - less than $200 for the smallest banks - was a reasonable payment for services rendered or an illegal kickback.

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