NY Senate budget offers title insurance companies a lifeline

Line would roll back DFS marketing ban

New York /
Mar.March 14, 2018 02:51 PM

From left: James Seward, Kevin Cahill and Maria Vullo

UPDATED, March 14, 6:06 p.m.: The New York State Senate threw title companies a rope in its proposed budget Wednesday.

The Senate’s budget for fiscal 2018-19 contains language that would rollback a series of strict anti-marketing regulations enacted last month by the Department of Financial Services. The regulations — which aim to curb excessive spending in an industry known for wining and dining clients — bans title companies from marketing expenses like offering clients meals and entertainment.

In a subsection of the Senate’s budget, lawmakers offer a clear definition of an “inducement.” The budget also states that under state insurance laws, title companies cannot be prevented “from undertaking any usual and customary marketing activity aimed at acquainting present and prospective customers with the advantages of using a particular title insurer or title insurance agent.”

So far, the Assembly has not included a similar line in its budget. Over the next few weeks, Gov. Andrew Cuomo and members of both Houses will hash out their respective proposals to finalize the final budget.

In January, the state Senate voted to ease the regulations by challenging DFS’ authority.  The Assembly has been exploring options cracking down on “bad actors” while instituting reform.

Last month, the New York State Land Title Association and two title companies filed a lawsuit to challenge the new rules. In court documents, they said the regulation would “wreak havoc” on title companies by forcing company closures, layoffs and reduced services.

Marla de Jesus, owner of NY Title Solutions and Agency in the Bronx, was one such casualty. She closed the business on January 31 and has since filed for unemployment.

“We weren’t taking long trips to Tahiti,” said de Jesus, who said the cost of complying with DFS’ rules was too high. The Senate lifeline won’t put her back in business, however. “It’s just a few months too late for me.”

 

 


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