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#1866241 - 10/29/13 08:27 PM Prohibition of Financing Single-Premium Insurance
CUCO Offline
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Joined: Mar 2011
Posts: 40
1026.36(i)

Does anyone know if there has been any clarification of this from the Bureau since the delay of the rule in May? Unless I'm missing something, I believe that they were supposed to release further guidance clarifying this?

Any help is appreciated!!

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#1866247 - 10/29/13 08:31 PM Re: Prohibition of Financing Single-Premium Insurance CUCO
rlcarey Online
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rlcarey
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What delay? I thought that was effective June 1, 2013.
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#1866251 - 10/29/13 08:36 PM Re: Prohibition of Financing Single-Premium Insurance CUCO
CUCO Offline
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#1866252 - 10/29/13 08:37 PM Re: Prohibition of Financing Single-Premium Insurance CUCO
raitchjay Offline
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OK
Delayed until January 10th, 2013. Sorry, i can't link my pdf in here or i would.
Last edited by raitchjay; 10/29/13 08:38 PM. Reason: correct date typo
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#1866253 - 10/29/13 08:40 PM Re: Prohibition of Financing Single-Premium Insurance CUCO
manimal Offline
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Binky I would check on the CFPB website, they have the most updated rules there as well as compliance guides.
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#1866258 - 10/29/13 08:47 PM Re: Prohibition of Financing Single-Premium Insurance CUCO
CUCO Offline
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Thanks. That's where I keep looking, but don't see anything updated yet. I wasn't sure if I was missing anything or not.

Would this apply to gap insurance for an RV or boat that may be a residence? That is our dilemma...

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#1866789 - 10/30/13 08:24 PM Re: Prohibition of Financing Single-Premium Insurance CUCO
John Burnett Offline
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John Burnett
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One 9/13/13 the CFPB amended the rule on the prohibition on financing insurance. Here's how it will read, effective 1/10/14:

(i) Prohibition on financing credit insurance. (1) A creditor may not finance, directly or indirectly, any premiums or fees for credit insurance in connection with a consumer credit transaction secured by a dwelling (including a home equity line of credit secured by the consumer's principal dwelling). This prohibition does not apply to credit insurance for which premiums or fees are calculated and paid in full on a monthly basis.

(2) For purposes of this paragraph (i):

(i) "Credit insurance":

(A) Means credit life, credit disability, credit unemployment, or credit property insurance, or any other accident, loss-of-income, life, or health insurance, or any payments directly or indirectly for any debt cancellation or suspension agreement or contract, but

(B) Excludes credit unemployment insurance for which the unemployment insurance premiums are reasonable, the creditor receives no direct or indirect compensation in connection with the unemployment insurance premiums, and the unemployment insurance premiums are paid pursuant to a separate insurance contract and are not paid to an affiliate of the creditor;

(ii) A creditor finances premiums or fees for credit insurance if it provides a consumer the right to defer payment of a credit insurance premium or fee owed by the consumer beyond the monthly period in which the premium or fee is due; and

(iii) Credit insurance premiums or fees are calculated on a monthly basis if they are determined mathematically by multiplying a rate by the actual monthly outstanding balance.
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#1867474 - 11/01/13 01:49 PM Re: Prohibition of Financing Single-Premium Insurance CUCO
CUCO Offline
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Thanks John. That is what I was looking for! In your opinion, if we finance an indirect loan on an RV or boat that meets the definiation of a dwelling, would it then be prohibited to finance GAP insurance or warranties on the collateral?

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#1867475 - 11/01/13 01:51 PM Re: Prohibition of Financing Single-Premium Insurance CUCO
John Burnett Offline
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John Burnett
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Yes, I believe it would be prohibited to do so.
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#1891213 - 01/28/14 05:59 PM Re: Prohibition of Financing Single-Premium Insurance CUCO
Queen Mum Offline
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How are you supposed to finance something that is to be calculated monthly? Maybe this is a silly question, but I don't work with credit life.

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#1893283 - 02/04/14 03:16 PM Re: Prohibition of Financing Single-Premium Insurance John Burnett
Runnin' on Empty Offline
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Please disregard my previous post. I was confusing credit life with credit unemployment ins. requirements.
Last edited by Runnin' on Empty; 02/04/14 04:28 PM.
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