I've been asked to do some research regarding the extension of unsecured credit and requiring credit life and AH.

From what i have found, the anti-tying rules prohibit a bank from requiring the borrower to obtain these products from an affiliate of the bank; however, REG Z addresses the fact that if it is required then it is a finance charge.

So, am i correct in stating: you may require credit life and AH as a condition of an unsecured loan, however, it may not be conditioned on the insurance being purchased from an affiliate of the bank.


We would then need to test our platform to ensure the premium calculates correctly as a finance charge and additionally, our disclsoures would need to be adjusted for this loan product.

To keep it clear to the customer does a disclosure need to be supplied that states credit life and AH is required for the product they have chosen and they may purchase credit life insurance from an insurance company of thier choice.

no comments????

Help.....

This is just an opinion but I would advise disclosing it depending on the relationship with your credit insurance provider.

We have never required credit insurance as a condition of a loan, but if we should we could not require them to use our provider because our loan officers are actual insurance agents of the provider.