We believe you are required to provide the customer with a written list of service providers that includes at least one provider who performs each of the required settlement services where the consumer or property is located.

Under Regulation Z, if a creditor allows a borrower to shop for certain settlement services that it requires, the creditor must provide the borrower with a written list of providers. This list must identify at least one available provider corresponding to each settlement service for which the borrower is permitted to shop. In other words, the list cannot consist of “only settlement service providers . . . that do not provide services where the consumer or property is located.”

Although the service providers included in your current list may perform services where your customer is located, this list may not be of much use if the included providers do not also perform services where the property is located. As such, we recommend including at least one service provider for each required settlement service who provides services where the property is located.

For resources related to our guidance, please see:

• Regulation Z, 12 CFR 1026.19(e)(1)(vi)(C) (“(C) Written list of providers. If the consumer is permitted to shop for a settlement service, the creditor shall provide the consumer with a written list identifying available providers of that settlement service and stating that the consumer may choose a different provider for that service. The creditor must identify at least one available provider for each settlement service for which the consumer is permitted to shop. The creditor shall provide this written list of settlement service providers separately from the disclosures required by paragraph (e)(1)(i) of this section but in accordance with the timing requirements in paragraph (e)(1)(iii) of this section.”)

• Regulation Z, Official Interpretations, Paragraph 19(e)(1)(vi), Comment 3 (“Written list of providers. If the creditor permits the consumer to shop for a settlement service it requires, § 1026.19(e)(1)(vi)(C) requires the creditor to provide the consumer with a written list identifying at least one available provider of that service and stating that the consumer may choose a different provider for that service. The settlement service providers identified on the written list required by § 1026.19(e)(1)(vi)(C) must correspond to the required settlement services for which the consumer may shop, disclosed under § 1026.37(f)(3). . . .”)

• Regulation Z, Official Interpretations, Paragraph 19(e)(1)(vi), Comment 4 (“Section 1026.19(e)(1)(vi)(C) provides that the creditor must identify settlement service providers, that are available to the consumer, for the settlement services that are required by the creditor for which a consumer is permitted to shop. . . . a creditor does not comply with the availability requirement in § 1026.19(e)(1)(vi)(C) if it provides a written list consisting of only settlement service providers that are no longer in business or that do not provide services where the consumer or property is located.”)