Hi. Our policy & procedures state that the Federal Sale of Insurance Disclosure is required for consumer loans that have VSI, even if no credit life/A&H was sold. This is required because we do not allow the consumer to choose/purchase from any other source – the Bank charges it on all consumer loans with applicable collateral for which we require full coverage hazard insurance on. We also include it in the APR.
I know that FDIC Part 343 Consumer Protection in Sales of Insurance is the main regulation to consider but I also based our P/P on Reg Z’s Supplement I to Part 1026 4(d)9 & 10.
Do we need to change P/P or is this correct?
1) Require Federal Sale of Insurance Disclosure when VSI is sold
2) Include the VSI charge in the APR
After looking over the sections you reference in your question, I would agree with the approach you have taken. However, if you are concerned about any legalities, you should consider reaching out to legal counsel, so you have everything covered.
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