Notice: Function _load_textdomain_just_in_time was called incorrectly. Translation loading for the wp-migrate-db domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /srv/app/gotoiba-dev/htdocs/web/wp-includes/functions.php on line 6121
Is the $3.00 fee that Illinois requires title companies to remit to the state for each title policy issued by its agents considered a Finance Charge? – IBA Compliance Connection

IBA Compliance Connection

Your go to source for compliance!

Is the $3.00 fee that Illinois requires title companies to remit to the state for each title policy issued by its agents considered a Finance Charge?

—

by

No, in our view this $3 fee should not be included in the finance charge when it is passed on to the borrower. Regulation Z exempts certain real-estate related fees from the scope of finance charges, including fees for title insurance “and similar purposes.” We believe this fee is excluded from the finance charge because it is so closely tied to the issuance of title insurance.

For resources related to our guidance, please see:

  • Illinois Title Insurance Act, 215 ILCS 155/14(b) (“Each title insurance company shall remit, for all of its title insurance agents subject to this Act for filing an annual registration of its agents, an amount equal to $3 for each policy issued by all of its agents in the immediately preceding calendar year.”)

  • Regulation Z, 12 CFR 1026.4(c)(7) (“The following charges are not finance charges: . . . (7) The following fees in a transaction secured by real property or in a residential mortgage transaction, if the fees are bona fide and reasonable in amount: (i) Fees for title examination, abstract of title, title insurance, property survey, and similar purposes. . . .”)