Under the prohibition on financing credit life insurance premiums, would financing the first year’s premium and monthly payments for the remainder of the term be allowed? If anyone has seen this addressed in the regulation, where is it? Thanks.
Section 1026.36 prohibits financing credit insurance, directly or indirectly. Your plan involves direct financing. That’s a problem.
On May 10th the CFPB announced they were delaying this section beyond the June 1, 2013 effective date and making changes to the monthly payment provisions. There was no detail on the changes. Keep an eye on my Blog. When anything further is published I will address it in an article. You may get lucky and find some relief.
The company that handles our debt cancellation product sent out a letter stating that as long as the monthly fees were not financed and not added to loan principal and do not accrue interest, that the fee can remain at the level monthly payment amount.
From the CFPB’s commentary on the final ruling: Finally, the
Bureau again emphasizes that a credit insurance product with a level or levelized premium is not prohibited by this final rule.
Are we ok to continue with the monthly level payments for debt cancellation? As long as we do not advance money to pay the fee on the borrower’s behalf if the borrower fails to pay the fee before the end of the monthly period?