The Illinois Land Title Association continues to work on addressing questions to the Illinois Department of Financial and Professional Regulation (IDFPR) related to the pending Disclosure of Financial Interest (DS-1) Form and related DS-1 Form Instructions on March 1st.
Clarifications are being sought regarding the Department’s limited statutory authority, form content, disclosure timeline and record maintenance responsibilities, and subsequent regulatory examinations. Click here for ILTA’s February 9th statement regarding the new DS-1 Form.
UPDATEx1: on February 16th, IDFPR provided some clarifying examples (click here) and further explanations as summarized below:
- The regulator’s focus is (1) making sure the DS-1 form is being sent and (2) information included is in good faith, with IDFPR also highlighting that they are not looking to regulate form compliance in an adversarial manner;
- While the new DS-1 form is required as of March 1st, IDFPR is looking for continued industry feedback over the next several months to learn more how the form is being completed and to provide further clarifications;
- Who must provide the form? The department is recommending two fundamental elements to consider – whether the producer/associate is (1) making a referral and (2) receiving compensation from that referral;
- Endorsements do not need to be included on the form;
- A form completion example in the linked IDFPR slide 10 includes input of both the fee percentage and amount, and while the department prefers both, only one of the two inputs is required – either percentage OR amount;
- What does “etc.” mean? The term will be regulated as a reference to Section 19(3) & (4) “like product” and “like charges,” respectively (note: IDFPR will be relying on underwriters to confirm further recommendations on this compliance so ILTA has offered to convene a meeting with the regulator); and
- Varying business arrangements such as financial interest in a portion of total year-end profits may not conveniently track with fee disclosure lines, but an attempt should still be made to complete the form with the regulator asking that producers be able to at least explain their calculation and not utlilize the calculation to “hide” compensation received from the referral.
UPDATEx2: on March 1st, the Illinois Real Estate Lawyers Association filed legal action for a temporary restraining order regarding implementation of the new DS-1 form, which was set for hearing on March 3rd at 10:30 a.m.; as of March 1st, IDFPR has not indicated any delay in implementation of the new DS-1 Form and related instructions.
UPDATEx3: on March 3rd, a temporary restraining order was granted regarding implementation of the new DS-1 form. The “old” DS-1 form is available by clicking here. The next hearing date on the related litigation was April 8th, which was continued for briefing status on May 11th. We will provide updates as they become available (click here for the initial TRO court order).