During Friday’s (August 13, 2021) Compliance Master’s Group session, you mentioned the up-front collection of single-premium credit insurance. I just wanted to clarify this issue to make sure I understand correctly.
On the risk assessment sample you provided, it states, “Institution does not utilize aggressive marketing tactics, promote loan flipping (frequent refinancing) or collect up-front single-premium credit insurance for life, disability, or unemployment when the consumer does not receive a net tangible financial benefit.”
Is this to say that credit insurance may NEVER be collected up front as a single premium? Or is it to caution against using aggressive tactics to promote the purchase? Would it be considered a UDAAP/predatory lending if a bank collects single-premium credit insurance premiums up front?