In the battle over inducements in the Title Industry there have been twists and turns, high-profile politicians, lobbying, stays of execution. It’s all beginning to feel like an episode of CSI: NY Department of Financial Services.
In May, New York Governor Cuomo and New York Department of Financial Services (DFS) Superintendent Maria Vullo introduced new regulations designed to limit business gifts and other inducements in exchange for future business in the title industry.
In December, two days after the rules went into effect, a six-week “stay of execution” was announced for key parts of the new rules, specifically a ban on meals and other entertainment to clients.
Understanding this story requires understanding two perspectives at once: that of the NY Department of Financial Services (and Gov. Andrew Cuomo) and that of the Title Industry.
The DFS has two primary concerns: that consumers are paying rising title insurance rates, which are a function of New York’s rising real estate values, and that title firms provide inducements (business gifts) in return for future business, which they then pass on to consumers in the form of marketing costs.
Title insurance companies are concerned that they have been given a bad name by a few bad actors. The title industry believes that the ability to perform basic development activities, like taking a client out to lunch, is essential and shouldn’t be restricted, especially in an industry where differentiation from competitors is difficult because insurance rates are set from above.
In the end, the “stay of execution” declared by the NY Department of Financial Services will expire. Section 228.2, Prohibition on Inducements for Future Title Insurance Business goes into effect on February 1st, 2018.
And so, it is with great regret that we inform you that we will not be able to provide our clients with the following in 2018:
– Guided whitewater rafting tours
– Vacation packages to the Alps
– World Series tickets
– Millions of dollars
– Other inducements of any kind
What we do offer is much better
All jokes aside, we have known for a long time that what matters to our clients isn’t what we give, but the excellent work product we provide.
If you’re involved in a high stakes multi-site real estate transaction, having a smooth and delay-free closing is important. If you’re buying a home, having clear ownership is important. We look forward to bringing our real estate expertise to your next transaction!
We are a service-oriented title insurance company that is trusted to close everything from complex multimillion-dollar commercial transactions to reverse mortgage transactions from our offices in New York and Philadelphia. Our record of excellence and our value-adding services have won us repeat business. We hope to earn yours as well!
To get in contact with WWLT or to learn more about our services, please visit our homepage today!