Gov. Andrew Cuomo’s former financial services chief on Thursday blasted a bid to ease regulations that prohibit the title insurance industry from wining and dining lawyers and real estate agents — and passing off costs to homeowners.

The Assembly this week unanimously passed a bill that would loosen the 2017 Department of Financial Services regulations Maria Vullo forged amid cases of title insurance representative wooing prospective clients with expensive outings to ball games, steakhouses and strip clubs — all chalked up to marketing expenses.

“It’s a clarification of an attempt by a former superintendent, to what I believe, is overstepping,” said Assemblymember Kevin Cahill (D-Kingston), who sponsors the bill and heads the insurance committee.

But Vullo — who served as the state’s banking and insurance regulator from 2016 to earlier this year — said the bill “sanctions corporate greed at the expense of New York’s homebuyers and should not become law.”

“The title industry claims that they want to buy cups of coffee. This is a complete ruse. Their practice is to buy a hundred-dollar bottles of wine at strip clubs, lavish seafood spreads, high-priced sports boxes and designer goods,” Vullo told THE CITY.

“If the coffee claim were true — and it isn’t — then the bill would simply state that they can buy cups of coffee. But this bill instead permits the longstanding and unscrupulous practice of inducing referral business by high-priced entertainment,” she added.

Cuomo Reviewing Measure

A spokesperson for Cuomo did not indicate whether the governor had a position on the bill, saying that the administration will “review it.”

The Department of Financial Services, whose new incoming superintendent is Cuomo’s former chief of staff, declined to comment.

Cahill told THE CITY Thursday he expects the state Senate to pass the bill next week. State Sen. Neil Breslin (D-Albany), who sponsors the measure in the Senate, did not immediately respond to request for comment, nor did a spokesperson for the chamber.

Home buyers in New York are typically required by mortgage lenders to purchase title insurance, which costs roughly $2,600 for a $500,000 home in New York City and is usually baked into closing fees.

Title insurers have been fighting the state regulations since they were enacted in 2017, suing to strike down the provisions. But a state appeals court upheld the regulations in January, reversing a lower court’s decision.

Bob Treuber, executive director of the New York State Land Title Association, said the current setup handcuffs the industry. “This bill makes a single, but needed change to allow title insurance providers to engage in normal business practices like other professionals,” he said.

But Kathryn Wylde, president of the Partnership for New York City, which represents businesses, slammed the measure and even questioned the need for title insurers.

“It is unclear what the title insurance company’s purpose is, since their loss claims are less than 5%, much lower than any other insurance sector,” Wylde said.

She added: “The state could self-insure and keep the revenues or reduce consumer costs and no one would be worse off. All the money going to wining and dining the lawyers who generally select which title companies get business is a waste. That is what [the Department of Financial Services] was trying to correct.”


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