Escrow Agent – Regulatory Enforcement
In 2010, the Washington legislature modified the Escrow Agents Registration Act that governs the admission, licensing, and conduct of Escrow Agents in Washington. All licensees are required to know and to comply with all sections of the Escrow Agents Registration Act RCW 18.44 et seq and the implementing regulations in WAC 208-680.
All Escrow Agents must first apply and be approved for an Escrow Officer license through DFI, and all Escrow Agents and any employees of an escrow company must comply with the Washington Licensure Requirements. Requirements include passing Washington’s escrow officer test, maintaining a surety bond, and maintaining a trust account in a financial institution with a branch in Washington State.
Among the 2010 changes to the Escrow Agent Registration Act, and in response to legal decisions in lawsuits arising from the conduct of certain escrow agents, the Act now codifies that a violation can be based on a failure to comply with applicable federal laws and regulations that include:
Truth in Lending – Regulation Z
Upon receiving a complaint that an escrow agent failed to comply with the Escrow Agent Registration Act, including by violating an incorporated federal law or regulation, DFI will first institute an investigation. Depending on the investigative findings, DFI may choose to initiate an enforcement action. As with other professions involved in the real estate industry, DFI has increased the frequency of enforcement actions against escrow agents since the financial crisis of 2007-08.
If a DFI investigation results in a finding that an Escrow Agent or an employee of an Escrow Agency violated an applicable law or regulation, penalties may include having to pay restitution, monetary fines, costs of prosecution, and investigation costs that may be substantial. The amount of restitution, fines, and costs DFI has levied following an enforcement action ranges from a few hundred dollars
to hundreds of thousands or millions of dollars and the revocation of licenses and prohibition against continuing to do business as an Escrow Agent in Washington.
https://dfi.wa.gov/sites/default/files/consumer-services/enforcement-actions/C-18-2364-19-FO03.pdf
In some instances, fines or portions of fines may be stayed pending compliance with other conditions DFI has imposed.
Ari Brown has litigated a variety of issues involving lending, mortgage origination and disclosures, loan servicing, broker and lender liabilities, and debt collection for more than twenty years. Cases he has litigated have informed application of the Mortgage Broker Practices Act; the Consumer Loan Act; Escrow Agent Registration Act and Washington Consumer Protection Act. Years of litigating cases pertaining to banking and lending practices both on individual bases and as class actions have informed Mr. Brown’s approach to dealing with alleged violations and has heightened his ability to mitigate common mistakes and to help financial licensees avoid actions that DFI may perceive as misconduct.
Robert Rhodes works with Mr. Brown on an as-needed basis. He has handled hundreds of administrative and licensing investigations and enforcement actions in various forums. He often draws on his extensive background in criminal and whistleblower law that occasionally becomes useful. Other team members are available as necessary.