DFPI Escrow Advisory Committee Meeting Minutes

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Silberberg questioned whether both escrow companies and employees need to be licensed as professionals for it to work. Additionally, escrow employees in real estate and title-controlled companies need to meet the same standards as those in independent escrow companies if exemptions are not removed. Controlled escrow operations are compartmentalized. Silberberg agreed with Davis on removing broker exemptions. Felde stated that he is in favor of a professional license for the settlement agent industry because escrow agents operate as professionals. A professional license leads to education, whi

settlement funds

DFPI’s website. During the review of Fountain Valley Escrow’s annual audited report, a DFPI examiner noted a particular reconciliation item which identified a fraudulent wire out due to a wire hacking incident. A special exam was assigned to investigate the issue further. The licensee explained that their business was hacked and they basically fell victim to a phishing scheme which led to the unauthorized wires that were sent out from their trust account. The licensee claimed that the bad actor gained access to their business operation system, including phone and email. The special exam disclo

consumer protection

effectively regulate the industry. Due to extremely limited resources, the escrow program’s exam team could only focus on priority examinations and cases causing direct consumer harm such as embezzlement and misappropriation of trust funds, etc. Cutting expenses did not appear to be an effective way of eliminating the deficit. So the DFPI needs to work with the industry to solve the deficit on the revenue side. This means reevaluating some of the fees and assessments that have not changed for decades or identifying new revenue sources. Greg Young shared with the committee in the last meeting

wire fraud

ails. Some policies only cover the cost of having someone investigate the Page 4 of 10 cyber incident but not the loss of trust funds. Davis commented that payoff demand fraud was also on the uptick, similar to cyber-attacks which target settlement agents. Liang informed the advisory members that the DFPI legal division is reviewing the recommendations from advisory members regarding rulemaking on audit procedures. The DFPI is also reviewing the lender vetting issue. Liang will share updates when they are available. 6. Examination Issues Suzuki stated that the exam staff have moved from conduc

business email compromise

ners are working diligently to investigate and finalize their results for these possible conservatorship cases. Page 6 of 10 Two of those three cases appear to be due to cyber theft, and the other appears to be a misappropriation of funds by the owner. Nothing else could be shared publicly on these ongoing investigations. Suzuki will provide more when these investigations are completed, and appropriate actions are taken. Liang added that the examiner’s hours incurred handling in-house conservatorships are not billable to any companies, and the DFPI cannot recover the costs from doing in-house