New York continues crackdown on Title Insurance

May 9, 2017 at 10:06 am Leave a comment

The Cuomo administration continued its crackdown on the title insurance industry last week by proposing a pair of measures that would tighten affiliation standards and further limit fees that can be charged.

The proposals are the latest step in a long running effort by the DFS to crackdown on perceived industry excesses. The press release issued by the Governor’s office explains that the new protections will “help ensure New Yorkers aren’t forced to shoulder outrageous and exorbitant expenses” while trying to become home owners.

“The industry-wide practices uncovered by Department of Financial Services were nothing short of shocking, and these reforms will help ensure perspective homeowners will be charged their fair share of title insurance fees and not a penny more.” Governor Cuomo said in the release.

I’ve read them both a couple of times now and the provisions could have their greatest impact on credit union CUSOS that offer title insurance. Specifically the regulation stipulates that a title insurance agent or title insurance corporation that accepts affiliated business from an affiliated person shall:(1) Function separately and independently from the affiliated person, including being staffed by its own employees,(2) Engage in all or substantially all of the core title services with respect to the affiliated business; and (3) Make a good faith effort to obtain, and be open for, title insurance business from all sources and not business only from affiliated persons.

The second regulation is similar to earlier proposals put out by DFS. It clamps down on the type of ancillary fees that can be charged. For example title insurance applicants could not be charged more than 200% of the fair market for bankruptcy searches.

Denny Farrell to Retire

Denny Farrell, the longtime chairman of the Assembly’s powerful Weights and Means committee announced that he would be retiring. It is unclear if he will finish out his term at the end of 2018. The 85 year old Farrell has been in the Assembly for a mere 42 years.

Entry filed under: General, New York State, Political.

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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