We believe the $3 mandatory title fee should be disclosed in “Section E. Taxes and Other Government Fees” because the fee is required by an Illinois law and is remitted by the title company to a governmental entity.
The Illinois Title Insurance Act requires title insurance companies to remit to the state of Illinois “an amount equal to $3 for each policy issued by all of its agents in the immediately preceding calendar year.” Regulation Z requires “recording fees and other government fees and taxes” to be disclosed under Section E as part of the “Recording Fees and Other Taxes.” Because the title insurance company is collecting and remitting this fee to a governmental entity, we believe the fee should be placed in Section E and aggregated as part of the “Recording Fees and Other Taxes.”
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 1026,37(g) (“Under the master heading ‘Closing Cost Details,’ in a table under the heading ‘Other Costs,’ all costs associated with the transaction that are in addition to the costs disclosed under paragraph (f) of this section. The table shall contain the items and amounts listed under six subheadings, described in paragraphs (g)(1) through (6) of this section.
(1) Taxes and other government fees. Under the subheading ‘Taxes and Other Government Fees,’ the amounts to be paid to State and local governments for taxes and other government fees, and the subtotal of all such amounts, as follows:
- (i) On the first line, the sum of all recording fees and other government fees and taxes, except for transfer taxes paid by the consumer and disclosed pursuant to paragraph (g)(1)(ii) of this section, labeled ‘Recording Fees and Other Taxes.’”)
- Regulation Z, Official Interpretations, Paragraph 37(g), Comment 1 (“The items listed under the heading of ‘Other Costs’ pursuant to § 1026.37(g) include services that are ancillary to the creditor’s decision to evaluate the collateral and the consumer for the loan. The amounts disclosed for these items are: Established by government action
- Regulation Z, Official Interpretations, Paragraph 37(g)(1), Comment 2 (“Any charges or fees imposed by a State or local government that are not transfer taxes are aggregated with recording fees and disclosed under § 1026.37(g)(1)(i).”)
- CFPB, Guide to the Loan Estimate and Closing Disclosure Forms, pages 43–44 (May 2018) (“Recording Fees and Other Taxes are fees assessed by a government authority to record and index the loan and title documents as required under State or local law, together with any charges or fees imposed by a State or local government that are not Transfer Taxes.”)