The Illinois Good Funds statute in the Title Insurance Act, 215 ILCS 155/26, has been amended again. Public Act 98-1067, which originated as HB 4677 and was effective August 26, 2014, authorizes a title insurance agent or company to agree with a lender to accept incoming lender funds of $50,000 or more by certified or cashier’s check. ATG members are not permitted to rely upon this statute and must continue to require a wire transfer for all funds of $50,000 or greater.

Originally, when Public Act 96-1454 became law in 2011, the wire transfer provision of the Good Funds statute worked in conjunction with the Closing Protection Letter (CPL) statute. 215 ILCS 155/16.1. The two worked together: title insurance companies were required to take on new liability to sellers and other parties for closings, but in exchange, the title companies were given some protection against a major form of closing losses, bank failures, by a good funds requirement of wire transfers. Now, the wire transfer protection to title companies has been greatly diminished, but the closing liability to title companies, produced by the CPL requirement, continues. Therefore, ATG requires wire transfers as a way of managing its risk.

The purpose of the recent amendment to the act was to lower closing costs for small banks, which often resist the additional cost of a wire transfer fee at closing. However, failures of small banks is a source of closing claims/losses to title companies and some ATG agents have even been affected by small bank failures. So, the size of the bank is not a factor in ATG’s application of the wire transfer requirement.

ATG agents may want to disclose the wire transfer fee on the Invoice for Title Charges so that the lender can include it in the GFE and it can be a seamless part of the closing charges.

Questions? Contact an underwriter.