Standard & Normal The Curious Exceptions

Peter G. Miller
OurBroker®

It's just business, the established and customary stuff that everyone accepts because, well, it is standard and normal -- except when it isn't. But what's ordinary in some places may be the exception elsewhere, and the differences probably are not that important, unless saving money is a significant issue.

The "problem" with state exceptions is that they raise discomforting questions. If one state can have pro-consumer legislation or a better way to handle common concerns, why not other states?

Consider title insurance. You absolutely need title insurance and you'll pay big money for it.

Except in Iowa.

Title insurance is a special form of coverage which tells buyers that with few exceptions they are getting good, marketable, and insurable title. If there's an error in the public records, the settlement provider missed an important claim in the chain of ownership, or someone makes a title claim against you, then the title insurance company will defend your claim, pay damages, and cover your losses.

But realty transactions in Iowa do not include title insurance. Somehow, magically, properties are bought and sold in that state without the title coverage required elsewhere.

Iowa does not use title insurance because the state operates a title guarantee program, a program funded with fees from attorneys and title abstractors. If there's a title claim, the state provides coverage. If attorneys or abstractors do not pay into the fund, they pay claims.

How about privacy?

With certain exceptions, banks in Alaska and Vermont do not share your data, by law cannot share your data, and won't share your data with credit card companies and telemarketers except with your express written permission.

Isn't that the way it should be everywhere? If banks in Vermont and Alaska can operate such systems, why not banks in other states? Surely the cost is not too high, otherwise banks in Alaska and Vermont would be folding each day. And certainly such systems cannot be too hard to operate, unless we are to believe that bankers in Alaska and Vermont are blessed with a level of competence and intelligence unknown to other bankers.

Why do you need a law to say that banks should not dole out your private information? Shouldn't you expect privacy? Isn't there a banker somewhere who seeks a marketplace advantage? Do you think a bank which said "open an account with us and we'll keep your data private" would win new customers?

For years we have been told that consumers could not obtain their credit scores for a host of foggy reasons. After all, if you know your credit score you might.... Well, actually, I'm not sure what anyone would do other than to try and get a better rating by acting more responsibly. And I can't figure out why that might be a problem.

Now, as this is written, both houses of the California legislature have passed SB 1607, a bill which would require lenders to furnish credit scores to consumers. Initiated by the California Association of Realtors and supported by just about everyone with common sense, this bill is likely to be signed shortly by Governor Davis -- or instantly passed if there's a veto.

If the good citizens of California can see their credit scores and civilization as we know it does not end, then why should folks who live in other states be deprived of such information?

And speaking of credit information, if you live in the fine states of Colorado, Massachusetts, Maryland, New Jersey or Vermont you're entitled to one free credit report per year, two if you live in Georgia. In Maine you'll pay $2 to obtain your credit information, $3 in Minnesota, $8 in California, and $8.50 in West Virginia, Texas, South Dakota, and New York.

Question: Why is a credit report free in some states but $8 or more in others? Are credit reports for folks in South Dakota or Hawaii more complex? Done with an abacus? Not delivered by mail? Should not everyone be entitled to a copy of their own credit report at least once a year without cost?

Before somebody moos about the "high cost" free reports represent to credit reporting agencies, consider that they already provide free reports in a number of states and seem to be surviving. Moreover, the fact that reports are available does not mean all consumers will order them each year. And if they do, so what. It's information consumers ought to have.

It's not a substitute for legal advice or the use of an attorney, but there is a huge amount of useful information on MyCounsel.com. This site has numerous articles regarding most legal topics written in plain language. A great resource.

Published: September 19, 2000

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Editor's Note: This article reflects the opinions of Peter G. Miller only and not necessarily the views of this or any other publication, organization or Website owner.

Peter G. Miller, also known as OurBroker®, is the author of six real estate books -- including The Common-Sense Mortgage -- and is the original creator and host of America Online's Real Estate Center. Peter's weekly columns appear in more than 100 newspapers nationwide, he is also published in a variety of other media outlets and he is a frequent speaker at national events and conventions. Peter welcomes your questions, comments, and news releases via e-mail at .