No. 32167 (New Rule): R592-13. Minimum Charges for Escrow Services

DAR File No.: 32167
Filed: 11/26/2008, 10:47
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this rule is to establish minimum charges for escrow services.

Summary of the rule or change:

The rule sets a minimum escrow fee based upon the purchase price or loan amount of the property in a sales transaction. The rule also includes a Penalty section and Enforcement Date section allowing 90 days from the effective date of the rule before the provisions of the rule will be enforced.

State statutory or constitutional authorization for this rule:

Sections 31A-2-404 and 31A-19a-209

Anticipated cost or savings to:

the state budget:

If approved, title licensees will no longer need to file escrow rates, which will then eliminate the filing fee they were paying the department. What impact the loss of this filing fee will have on state revenues is not known since the department does not track the revenues by lines of insurance.

local governments:

This rule deals solely with the relationship between the Title and Escrow Commission and title insurance licensees. It has no effect on local governments.

small businesses and persons other than businesses:

Title producers, agencies and insurers will no longer be required to pay filing fees to the state. The amount of this cost savings is unknown since the department has not tracked it. A filing fee is $25. Before this rule companies, agents, and producers filed their own minimum escrow rates. Now with the rule everyone will have to start with the new minimum, which will level the playing field. This will help the consumer because they will know where the escrow fee starting point will be based on the loan amount.

Compliance costs for affected persons:

Title producers, agencies, and insurers will no longer be required to pay filing fees to the state. The amount of this cost savings is unknown since the department has not tracked it. A filing fee is $25. Before this rule companies, agents, and producers filed their own minimum escrow rates. Now with the rule everyone will have to start with the new minimum, which will level the playing field. This will help the consumer because they will know where the escrow fee starting point will be based on the loan amount.

Comments by the department head on the fiscal impact the rule may have on businesses:

Licensees will see a cost savings as a result of no longer having to pay the filing fee. However, the fiscal impact of the new minimum escrow fee rule will vary from licensee to licensee. Much will depend on what they were charging before this minimum went into effect. D. Kent Michie, Insurance Commissioner

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Insurance
Title and Escrow Commission
Room 3110 STATE OFFICE BLDG
450 N MAIN ST
SALT LAKE CITY UT 84114-1201

Direct questions regarding this rule to:

Jilene Whitby at the above address, by phone at 801-538-3803, by FAX at 801-538-3829, or by Internet E-mail at [e-mail]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

01/14/2009

Interested persons may attend a public hearing regarding this rule:

1/12/2009 at 9:00 AM, Utah State Capitol, Room 250, 350 N State St, Salt Lake City, UT

This rule may become effective on:

01/21/2009

Authorized by:

Jilene Whitby, Information Specialist

RULE TEXT

R592. Insurance, Title and Escrow Commission.

R592-13. Minimum Charges for Escrow Services.

R592-13-1. Authority.

This rule is promulgated by the Title and Escrow Commission pursuant to the authority provided in Section 31A-2-404, authorizing the Title and Escrow Commission to write rules, and Section 31A-19a-209, authorizing rules to establish minimum charges for escrow services.

 

R592-13-2. Purpose and Scope.

(1) The purpose of this rule is to establish minimum charges for escrow services.

(2) This rule applies to all title insurers, agencies and producers providing escrow services in Utah.

 

R592-13-3. Definitions.

In addition to the definitions of Sections 31A-1-301, 31A-2-402,and 31A-19a-102, the following definitions shall apply for the purpose of this rule:

(1) "Charge" means a dollar amount charged for a service rendered by a title insurer, title agency, or title producer.

(2) "Minimum escrow fee" means the lowest amount that can be charged for escrow settlement services that are rendered which incorporates both the escrow closing charge and the basic document preparation charge.

(3) "Pass through charges" means the actual and reasonable charge or expense for services rendered that are not included in the minimum escrow fee.

 

R592-13-4. Minimum Charge for Escrow Services.

(1) A title insurer, agency and producer providing escrow services in Utah must not charge less than the minimum escrow fee for each side of the transaction. The minimum escrow fee shall be as follows:

 

TABLE

 Purchase Price/Loan Amount                    Minimum Escrow Fee

 $0 to $180,000.00                             $150.00 per side

 $180,000.01 to $250,0000.00                   $250.00 per side

 $250,000.01 and above                         $350.00 per side

 

(a) As an example:

(i) On a real estate purchase of $100,000 the minimum escrow fees would be as follows:

(A) $150 charged to the buyer;

(B) $150 charged to the seller.

(ii) On a refinance loan amount of $300,000 the minimum escrow fee would be $350 charged to the borrower.

(2) All other charges or expenses must be actual and reasonable passed through to the consumer.

 

R592-13-5. Penalties.

A person found, after a hearing or other regulatory process, to be in violation of this rule shall be subject to penalties as provided under Section 31A-2-308.

 

R592-13-6. Enforcement Date.

The commissioner will begin enforcing this rule 90 days from the rule's effective date.

 

R592-13-7. Severability.

If any provision of this rule or the application thereof to any person or circumstance is for any reason held to be invalid, the remainder of the rule and the application of the provision to other persons or circumstances shall not be affected thereby.

 

KEY: title, escrow insurance

Date of Enactment or Last Substantive Amendment: 2009

Authorizing, and Implemented or Interpreted Law: 31A-2-404, 31A-19a-209