The relentless back and forth on the legality of New York’s strict title insurance regulations continues.
The state appeals court has reinstated rules that ban the title insurance industry from wining and dining its clients. And the court’s decision once again comes in response to a ruling from New York Supreme Court Judge Eileen Rakower, who had overturned the regulations in their entirety.
If all this sounds familiar, that’s because it is.
The state Department of Financial Services rolled out its strict regulations on the industry at the beginning of 2018, banning firms from treating their clients to services like meals and entertainment; the New York State Land Title Association filed a petition challenging them soon after. Rakower annulled the regulations during the summer of 2018, describing them as “absurd,” but DFS appealed, and the appeals court reinstated the vast majority of the rules in January 2019.
However, the Appellate Division remanded some aspects of its case back to the Supreme Court, where Rakower once again annulled the entire law in a ruling this past summer. DFS appealed again, and the Appellate Division sided with them again in its Dec. 26 ruling.
Rakower described the regulations as “impermissibly vague” in her ruling over the summer, but the Appellate Division disagreed in its reversal, saying that they are clear enough for “‘a person of ordinary intelligence’” to understand.
Mylan Denerstein, attorney for the Land Title Association, did not respond to a request for comment. The group said in a statement that it is “currently reviewing the latest court decision and is determining next steps.”
DFS released a statement on Thursday hailing the latest decision as “a victory for New York consumers.”
“The regulation upheld by the court includes important prohibitions on the use of unnecessarily expensive and lavish gifts in exchange for business referrals, which for too many years resulted in consumers paying higher closing costs,” the agency said. “The ruling enables DFS to continue to exercise responsible supervision of New York’s title insurance industry.”