The title insurance industry must be going through a wicked case of déjà vu.
For the second summer in a row, the Department of Financial Services is appealing a ruling from New York Supreme Court Judge Eileen Rakower that overturned the agency’s strict new regulations on the title insurance industry. DFS filed its notice of appeal on Friday challenging “each and every part” of Rakower’s decision from earlier in August that struck down the new rules.
DFS implemented its strict new regulations at the beginning of 2018, which banned title insurance companies from wining and dining their clients. The agency framed it as an attempt to stop the companies from overcharging consumers for their services, and the industry group New York State Land Title Association quickly filed a lawsuit challenging them.
Rakower annulled the rules for the first time last summer, describing them as “absurd,” but DFS appealed her decision to the Appellate Division of the New York State Supreme Court soon after, which reinstated most of the rules at the start of the year.
The higher court remanded some parts of the case back to New York Supreme Court, and Rakower once again overturned the entire law earlier this summer. She described it as violating the First and Fifth Amendments of the Constitution.
Representatives for the title insurance industry and DFS did not immediately respond to requests for comment, but DFS superintendent Linda Lacewell previously told The Real Deal that she believed Rakower’s most recent decision violated the prior ruling from the Appellate Division.