Important Update to NY Regulation 208 on Title Insurance Inducements

By admin

In 2018, the NY Department of Financial Services enacted regulations designed to limit NY title insurance companies from giving real estate professionals business gifts and other inducements, like say, a cup of coffee.

After the NYSTLA filed a lawsuit challenging the new regulations, NY Supreme Court Judge Eileen Rakower annulled the “absurd” rules. 

DFS appealed, the Appellate court reinstated the majority of the regulations in 2019, and Rakower responded by annulling the law again, ruling that the regulations were “impermissibly vague” and in violation of the First and Fifth Amendments of the Constitution.

Now Regulation 208 has been reinstated after the court reversed Judge Rakower’s second ruling. 

• NY Title Insurance Companies are again prohibited from entertaining and providing gifts to clients and prospective clients pursuant to the regulations. 
• NY Title Closers will not be affected by this update because Judge Rakower’s decision regarding closers and ancillary fees still stands. They will still be allowed to charge “pick-up fees” and receive tips.

For now, this means that our agents won’t be able to fly you around in our private jet or tell you any jokes that may be construed as “entertaining.”

NYSTLA still has the option to appeal, and we will keep you updated!