Re: Unlawful Inducement Rule 69B-210-010
Update from Beverly McReynolds, FLTA Agent Section Chair
The hearing yesterday afternoon in Tallahassee went quite well. After comments were heard from members of the FLTA and other interested parties, Nancy Rowell of the DFS took a few minutes to clarify the position of the Department. Her comments were well received by the audience. Below in bold italics you will see comments from the DFS and further concerns raised by audience members:
CONCERN: “The imposed restriction on advertising and marketing is anti small business. Only those who could afford radio, television and billboard advertising can make the real estate community aware of their existence and services.”
DFS RESPONSE: It is in no way the intention of The Department to limit the ability of small title agents to lawfully market their services. They acknowledge that the language in the Rule is overly broad and they intend to work on it to make their position(s) clear, easy to comply with and reasonable. They may consider removing paragraph 4 (r) in its entirety or including a reference to the accepted $25.00 limitation on give aways to eliminate the confusion. They clearly stated that we can market our services at events targeting a number of real estate professionals and unrelated to specific properties i.e. Board events, educational seminars and other related industry functions. What they do not want to see is the promotion of a single client for a specific property with the goal of getting that individual order for title insurance.
CONCERN: “Because the Rule pertains only to title agents and not to underwriter direct operations, it will create an unlevel playing field in the marketplace.”
RESPONSE: They are sensitive to our concerns and Nancy has already reached out to the OIR about their adopting a similar Rule. We restated our desire that the OIR Rule be identical to and published simultaneously with the DFS Rule.
CONCERN: “By including “title agents and escrow agents” in the definition of interested parties, the Rule interferes in the employer/employee relationship. For example, if taken literally, a title agency could not reimburse its associates for their cell phone usage.”
RESPONSE: They had no intention of interfering with employer/employee relationships and will work on the definition of “interested party” in order to remove that concern. They also acknowledged that parts of the proposed Rule could be interpreted to interfere with underwriter/agent relationships. Certain items insinuate that underwriters could not hold seminars or provide services for their agents. They understand these things are necessary for the benefit of the industry and the consumer alike.
CONCERN: “A blanket objection to Affiliated Business Arrangements is imposing a second layer of interpretation to an already complicated RESPA rule making compliance more difficult if not impossible.”
RESPONSE: The Department has no intention of eliminating properly formed affiliated business arrangements. What they are seeking in this Rule is clear authority to shut down sham joint ventures. Several audience members questioned whether that could be achieved through a simple reference to ventures created for the purpose of generating kickbacks within this Rule. Further discussion was requested.
Because of the outpouring of concern by the industry, they have agreed to keep the record open until October 1, 2010, so that all interested parties will have the opportunity to submit comments. They were very clear that they want to hear what we have to say and will keep an open mind.
Again, all comments are to be directed to:
Ms. Lorna Noren
Bureau of Investigation Agent and Agency Services
Florida Department of Financial Services
200 East Gaines Street
Tallahassee, FL 32399-0320
Re: Unlawful Inducement Rule 69B-210-010
We will continue to monitor the progress of this proposed Rule and keep you posted on the progress. Thank you to those of you who have already submitted comments and those who will be doing so prior to the October 1 deadline.
FLTA Agent Section Chair