April 25, 2018


In This Issue:

  • Compliance Update: GARC Fee Due May 1
  • TDI Quarterly Audit Results Published
  • Texas Attorney General Opinion: Consequences of Failing to Comply With the Requirements for Continuation of Existing Private Transfer Fee Obligations
  • ALTA-backed Bill Introduced in U.S. House to Require the CFPB to Publish More Guidance for Industry
  • Wells Fargo Hit With $1 Billion in Fines Over Home and Auto Loan Abuses

Compliance Update: GARC Fee Due May 1

TLTA | April 25, 2018
Title agents are required to collect a Guaranty Assessment Recoupment Charge (GARC) fee for each owners and loan (mortgagee) policy issued throughout all of 2018, and then remit these funds quarterly to TTIGA. The fee--which is set by the Commissioner of Insurance--is $4.50 per policy for the entire year of 2018. The GARC fee will only be in effect for one year, and the remittance process is very similar to the Guaranty Fee remittance (the Guaranty Fee has been suspended for 2018). GARC funds for Q1 must be submitted by May 1.
 
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Remittance Form »

TDI Quarterly Audit Results Published 

Texas Department of Insurance | April 24, 2018
The following is a summary of recent TDI audits, violations, and enforcement actions from December 2017 through February 2018. Read TDI's complete summary of operations for the quarter, or read the key statistics below. 

Compliance Audits: TDI's goal is to comprehensively audit agencies at least once every two years. This quarter, TDI conducted 62 audits.

Commissioner Orders: This quarter, TDI signed two Commissioner Orders. As of this report, 48 cases remain active and under investigation.

Compliance Audit Results: Below are TDI's most common audit findings for the quarter that ended in February. The numbers below represent how many agencies had an infraction, not the number of times the infraction occurred:

Number of Agencies
Category
Description
37
Texas Insurance Code
Section 2702.053 - Actual receipts and/or disbursements not in agreement with settlement statement or premium split not disclosed
19
Procedural Rules
P-21: Schedule D of commitment not in file or premium split not disclosed on commitment
32
Procedural Rules
P-73: Failure to prepare/maintain form T-64 (TD) when CD used
17
Minimum Escrow Accounting Procedures & Internal Controls
#15 - Disbursement sheets missing, incomplete or incorrect
24
Minimum Escrow Accounting Procedures & Internal Controls
#16 - Every disbursement not supported by invoice or sufficient other evidence
30
Escrow Accounting
Outstanding checks not cleared timely



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Texas Attorney General Opinion: Consequences of Failing to Comply With the Requirements for Continuation of Existing Private Transfer Fee Obligations

Texas Attorney General | April 24, 2018

Summary of Opinion:
If the payee of a private transfer fee obligation fails to comply with the notice requirements under section 5.203 of the Property Code, the private transfer fee obligation is void, and the property is not subject to further obligation under the private transfer fee obligation. The Legislature did not authorize substantial compliance with the notice requirements of section 5.203. A court would therefore likely conclude that a payee must strictly comply with those requirements, and failure to meet even one payee requirement would void the private transfer fee obligation.
 
Chapter 5, subchapter G of the Property Code does not address the validity or enforce ability of a private transfer fee obligation when a change in the use of the underlying land occurs. 
 
Section 5.205 of the Property Code requires that a "seller of real property that may be subject to a private transfer fee obligation shall provide written notice to a potential purchaser stating that the obligation may be governed by this subchapter." The Legislature did not provide specific requirements regarding this notice, and a court is unlikely to read requirements into the statute that the Legislature did not enact. A seller's failure to provide notice under section 5.205 will not void the private transfer fee obligation.
 
Read the Opinion »
Read the Request for Opinion »


ALTA-backed Bill Introduced in U.S. House to Require the CFPB to Publish More Guidance for Industry

ALTA | April 23, 2018
Reps. Sean Duffy (R-WI) and Ed Perlmutter (D-CO) introduced H.R. 5534, the Give Useful Information to Define Effective Compliance Act, or GUIDE Compliance Act. Over the last year, ALTA has worked with Reps. Duffy and Perlmutter, along with the Mortgage Bankers Association, to draft this legislation.

This bipartisan legislation establishes a formal process for the Consumer Financial Protection Bureau (CFPB) to provide formal, clear, and authoritative guidance to businesses about compliance with regulations. The goal is to give title and other financial companies more confidence about how the CFPB views their business practices.


Wells Fargo Hit With $1 Billion in Fines Over Home and Auto Loan Abuses

NPR | April 20, 2018
The Consumer Financial Protection Bureau is levying a $1 billion fine against Wells Fargo — a record for the agency — as punishment for the banking giant's actions in its mortgage and auto loan businesses.
 
Wells Fargo's "conduct caused and was likely to cause substantial injury to consumers," the agency said in its filings about the bank.
 
Wells Fargo broke the law by charging some consumers too much over mortgage interest rate-lock extensions and by running a mandatory insurance program that added insurance costs and fees into some borrowers' auto loans, the CFPB said. 
 
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