[kmeade]

If a consumer borrower was overcharged for credit life insurance, what regulations determine how the overpayment needs to be refunded to the borrower? Example: If the overpayment is on a loan that has already paid out, but the borrower has another loan, can this overpayment be credited to the new loan, or does a separate check need to be issued to the borrower?

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[rcooper]

I think the best place to look is your loan contract for what is permissible. In general, since these are separate accounts, I think you would need to refund the customer and if they choose to apply it to the new loan they can certainly do that. Reg X has rules regarding refunding surpluses in escrow accounts if an escrow account is involved.

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