Magazine article American Banker

CFPB Penalizes Title Company over RESPA Steering

Magazine article American Banker

CFPB Penalizes Title Company over RESPA Steering

Article excerpt

Byline: Kate Berry

The Consumer Financial Protection Bureau fined an Indiana title company $1.25 million on Wednesday for steering borrowers to an affiliated title insurer without disclosing that three executives are owners of the insurer.

The CFPB found that Meridian Title in South Bend, Ind., failed to disclose its numerous executive relationships with Arsenal Insurance, a title insurer in Camden, Ind. The companies have offices in Indianapolis that are within five miles of each other.

The bureau found that Meridian routinely selected Arsenal as the title insurance underwriter for its customers and was able to keep extra money beyond the commissions it normally would have been entitled to collect.

"Meridian Title illegally steered consumers into purchasing a product from an affiliated company to add to its bottom line," CFPB Director Richard Cordray said in a press release. "We're ordering it to halt this practice and pay up to $1.25 million to consumers who were harmed."

Meridian's president and CEO, Mark Myers, did not return a phone call and email seeking comment. Arsenal also did not return a call seeking comment.

The CFPB's administrative consent order stated that Meridian has eight individual owners, three of whom are owners and executives at Arsenal as well.

Andrew Drake, Arsenal's president, is a vice president and senior counsel at Meridian. Debbie Collins, a vice president and agency representative at Arsenal, also serves as senior vice president of sales and marketing at Meridian. …

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