Dept.of Financial Services (DFS)
The New York State Department of Financial Services was created by transferring the functions of the New York State Banking Department and the New York State Insurance Department into a new department. This transfer of functions became official on October 3, 2011.
The stated mission of the DFS is, “To reform the regulation of financial services in New York to keep pace with the rapid and dynamic evolution of these industries, to guard against financial crises and to protect consumers and markets from fraud.”
New York State Department of Financial Services main office is located at One State Street, New York, NY 10004-1511.
The DFS maintains offices in Albany, Buffalo, Mineola and Syracuse.
The website address is http://www.dfs.ny.gov .
Market Conditions Investigation
In 2012, the DFS initiated a market conditions investigation of the title insurance industry. This investigation included section 308 letter to underwriters, the subpoenaing of information from title agents and a one-day, non-adjudicatory public hearing on December 10, 2013.
Link to DFS web site with transcript of December 10, 2013 hearing and transcript errata document.
The NYSLTA requested an opportunity to supplement the testimony with additional information intended to “fill in the gaps” in the Department’s line of inquiry. A written statement was delivered to the DFS on February 7, 2014 and a follow-up meeting was held on February 12, 2014. This communication between the Department and the Association was frank, cordial and productive.
The NYSLTA has a professional working relationship with the DFS, in which the Association offers a resource for information on the title insurance industry and a channel of communication to the title insurance professionals of New York State.
Statement to DFS presented February 7, 2014
DFS Opinion Letters
With recent news that the CFPB has filed a RESPA enforcement action, and the renewed possibilities of Title Insurance Agent Licensing, it’s easy to forget that the DFS (f/k/a the Insurance Department) has already given Title Insurance Agents fairly clear answers on many issues regarding the Title Insurance business.
Set forth below are links to opinions that clearly state the Departments position on many issues, including but not limited to Insurance Law Section 6409(d) violations, joint venture arrangements, and coercing the use of a particular title insurance provider.
All the included Opinions are currently posted on the DFS website, and are currently considered to be in full force and effect. All title insurance professinals are encouraged to read or re-read these opinions so if you see these behaviors recurring, you can knowledgably inform consumers, colleagues and possibly the NYSLTA or DFS about them.
Reduction in legal fees by Attorney Agents
Joint Venture requirement of multiple sources of business
RESPA conflict and Banking Law
Joint venture requirements
Lender commissions for TI referrals
Charitable donations an inducement
Settlement cost reductions as an inducement
Reduced bank attorney fees as an inducement