Q: Does the Consumer Financial Protection Bureau regulate title insurance agents? My understanding is, it does not, and, that being the case, I don’t understand how the agency can require agents to comply with data security and other requirements that apply to financial institutions the CFPB does regulate.
A: You are correct – the CFPB does not regulate title insurance agents and has no authority to require them to do, or not do, anything. However, the CFPB and other financial industry regulators have made it clear that financial institutions will be held responsible for the actions, or lapses, of the third party vendors with which they do business. So you’re seeing a trickle-down effect. Lenders increasingly are requiring title agents and other vendors to meet key compliance standards in order to manage their own liability risks and to demonstrate the due diligence they know their regulators will be expecting of them. So the CFPB can’t require you to meet these standards, but your ability to continue working with many lenders almost certainly will.