Judge Enjoins State from Implementing DS-1 Disclosure of Financial Interest Form

Attorneys’ Title Guaranty Fund, Inc. (ATG) prevailed in its request for a stay of implementation against the Illinois Department of Financial and Professional Regulation (IDFPR). The judge granted ATG’s request for a stay of implementation of the revised DS-1 form until a hearing on the merits. He found particularly compelling ATG’s argument that attorneys should not be required to disclose their fees to third parties and that the IDFPR does not have the authority to regulate attorneys’ fees.

ATG believed the form, which is meant to disclose to consumers the fees related to title and settlement services, does not accomplish its intended objective, contains terms that are confusing to consumers, exceeds the regulator’s statutory authority, and shows serious bias against lawyer agents both in the disclosure form itself and in the instructions for completing it.

The title insurance company has been among the more vocal advocates for Illinois to take action regarding egregious forms of market conduct, such as kickbacks and other forms of consumer fraud or deceptive business practices. 

ATG and other industry leaders have been working with the Title Insurance Division of the IDFPR to improve the amended DS-1 Disclosure for Producers of Title Insurance Business and Instructions for Completing the Disclosure of Financial Interest Form first proposed by the IDFPR in early April 2018. Based on industry feedback, the IDFPR further amended the DS-1 content and delayed implementation from April to July. On June 26, ATG hosted representatives of the Illinois Land Title Association and the Illinois Real Estate Lawyers Association for a meeting with the IDFPR to express the industry’s remaining concerns. ATG filed the suit for injunctive relief as the July 1 implementation date approached with no resolution to important outstanding issues.

ATG’s goal has been to help the department develop a disclosure form that conforms to the state’s statutory authority, ensures that consumers have access to legal counsel when engaging in a real estate transaction, and assists the state in accomplishing its objective of improving disclosure to consumers of fees related to title and settlement services when performed by a Producer of Title Business as defined by the Illinois Title Insurance Act.