Final answer:
According to RESPA, a settlement service provider must disclose the affiliated business arrangement to a loan applicant when they refer them to an affiliated business for settlement services. This disclosure should be made in writing and include information about the relationship between the businesses and the estimated charges for the referred services.
Step-by-step explanation:
According to RESPA (Real Estate Settlement Procedures Act), a settlement service provider who refers a loan applicant to an affiliated business for settlement services must disclose the affiliated business arrangement at or before the time of the referral or when the provider makes an oral or written arrangement to refer settlement service business to the affiliated business. The disclosure should be made in writing and must describe the nature of the relationship between the two businesses and the estimated charge or range of charges for the referred settlement services. The purpose of this requirement is to ensure transparency and prevent conflicts of interest.