Under fire, title insurance companies spend heavily in Albany

State-level lobbying expenses rose 67% between 2014 and 2017

New York State Capitol
New York State Capitol

As Gov. Andrew Cuomo stepped up his effort to crack down on title insurance companies in 2015, the industry dispatched a small army of lobbyists to Albany.

Amid continued scrutiny of what the state calls excessive marketing expenses, title insurers spent 67 percent more on paid lobbyists during the first half of 2017 than they did three years prior, according to data from New York’s Joint Commission on Public Ethics. According to JCOPE, companies including Fidelity National Title Group, First American Title, and Stewart Title Insurance Company spent $240,992 between January and June 2017, compared to $143,875 during the same period in 2014.

The biggest spender was First American — a California-based insurer that’s a dominant player nationwide — which has forked over $441,750 to lobbyists in New York since 2014, records show.

During the first half of 2017, First American paid veteran political consultant Hank Sheinkopf’s firm $45,000, JCOPE records show. It also paid $33,000 to Empire Advisors, a firm owned by George Haggerty, who was executive deputy superintendent of the state’s Department of Financial Services in 2011 and 2012. Empire also lobbied on behalf of First Nationwide Title, a New York City-based title agency, which paid the firm $96,000 between January 2016 and June 2017.

The New York State Land Title Association — a membership organization representing title companies — was another big spender, paying lobbyists $405,000 between January 2014 and June 2017. It retained two Albany-based firms, Ostroff Associates and Corning Place Communications, according to JCOPE.

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While NYSLTA’s annual lobbying expenditures have risen only slightly each year, several firms increased their budgets around 2015, as Gov. Cuomo began scrutinizing the industry. (Earlier this month, DFS requested itemized lists of gifts and marketing expenses from three firms.)

First Nationwide, for example, did not hire paid lobbyists in 2015 but increased its lobbying budget to $60,000 the following year. Fidelity, which didn’t pay New York lobbyists in 2014, spent $56,000 in 2015 and $90,000 in 2016, JCOPE data show. It paid lobbying firm Albany Strategic Advisors $45,000 during the first half of this year.

In New York State, the rates for title insurance — a form of insurance that guarantees buyers obtain “clean title” to their property — are set by an organization called the Title Insurance Rate Service Association (TIRSA), with the industry’s largest players having a seat at the table. Without competitive pricing, many title agents lavish clients with tickets to Yankee games, pricey dinners or gifts to win business.

In May, Gov. Cuomo and DFS Superintendent Maria Vullo introduced new regulations to limit business gifts in light of an investigation that revealed title companies regularly spend millions of dollars on inducements to win new business.

But two days after the rules took effect on Dec. 18, and amid pressure from several state lawmakers, DFS granted a six-week postponement for key elements of the new rules, specifically a ban on offering meals and entertainment to clients.

In a Dec. 20 statement, DFS Superintendent Maria Vullo said she agreed to the delay because the state Assembly plans to hold hearings on the title insurance industry in mid-January. “I look forward to testifying at any hearing the Legislature may hold,” she said, to shine a light on “the industry’s history of inappropriate, and in some cases, illegal conduct that has resulted in decades of inflated title insurance rates.”

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