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#1651158 - 01/13/12 09:28 PM Federal Credit Application Insurance Disclosure
1995Banker Offline
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Consumer Protection for Depository Institution Sales of Insurance - 12 CFR 208 (Timing and method of Disclosures)states: A covered person must provide the disclosures orally and in writing before the completion of the sale of an insurance product or annuity to a consumer. The disclosures concerning the prohibition on tying an extension of credit to an insurance product or annuity purchase must also be made orally and in writing at the time the consumer applies for an extension of credit in connection with which an insurance product or annuity will be solicited, offered, or sold.

Question: If applicant comes in, applies and their early docs are mailed to them, can we include the federal credit application insurance disclosure w/the early docs, or must the disclosure be made during face to face applicatiton?

As always, thanks!
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#1651274 - 01/16/12 01:48 PM Re: Federal Credit Application Insurance Disclosure 1995Banker
Dan Persfull Online
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We include the written disclosure in our application packets for the products we offer an insurance product, for those products that we don't we do not provide the disclosure at all. But:

Question: If applicant comes in, applies and their early docs are mailed to them, can we include the federal credit application insurance disclosure w/the early docs, or must the disclosure be made during face to face applicatiton?

If the loan officer offered or solicited insurance in a face to face interview the notice must be provided at that time. IOWs if they quote a payment with and without insurance they must provide the notice. If they mention we offer insurance coverage, would you be interested, then they must provide the notice.
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#1652363 - 01/18/12 08:08 PM Re: Federal Credit Application Insurance Disclosure 1995Banker
RR Joker Offline
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This only applies in connection with a request for CREDIT...correct? IOW, if you have a deposit product that comes with an insurance product, it doesn't apply...right?
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#1652404 - 01/18/12 08:35 PM Re: Federal Credit Application Insurance Disclosure 1995Banker
Dan Persfull Online
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It applies to any insurance product the bank may solicit or sell. Review 343.40 (FDIC Rules and Regs) for what you must disclose.
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#1652723 - 01/19/12 03:10 PM Re: Federal Credit Application Insurance Disclosure 1995Banker
RR Joker Offline
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Okay, well then I'm confused. The packet that comes with the account contains the Not, Not, Not disclosure. The product has nothing to do with an extension of credit, so therein lies my confusion at the onset of part 343.

(a) Anticoercion and antitying rules. You may not engage in any practice that would lead a consumer to believe that an extension of credit, in violation of section 106(b) of the Bank Holding Company Act Amendments of 1970 is conditional upon either:
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#1652728 - 01/19/12 03:27 PM Re: Federal Credit Application Insurance Disclosure 1995Banker
rlcarey Online
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RRJ: That is 343.30 and not 343.40 that Dan quoted.
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#1652896 - 01/19/12 04:48 PM Re: Federal Credit Application Insurance Disclosure 1995Banker
RR Joker Offline
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Ah geez...thanks guys..I'm a bit overwhelmed, apparently!
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#1669740 - 02/24/12 08:59 PM Re: Federal Credit Application Insurance Disclosure 1995Banker
Eldon96 Offline
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I keep seeing references to FDIC 343.40.

However, if we're a FRB bank, would I be accurate in quoting Reg H (208.84) in any training or policies on the same subject?

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#1669748 - 02/24/12 09:05 PM Re: Federal Credit Application Insurance Disclosure 1995Banker
Dan Persfull Online
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Part 343 is the FDIC version of the Code. You would want to quote your regulator's applicable version of the Code.
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#2067896 - 03/07/16 07:45 PM Re: Federal Credit Application Insurance Disclosure 1995Banker
JWills, CRCM Offline
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Going to piggyback on this--so if we have an in person application, the lender is NOT required to sign the form? Our form states For Telephone Applications Only and has a lender signature line. Some of my lenders are getting this form sent back to them for signatures by the review department. I am thinking they only sign if the disclosure is given orally. Thanks in advance.
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#2067901 - 03/07/16 07:57 PM Re: Federal Credit Application Insurance Disclosure 1995Banker
Dan Persfull Online
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If the disclosure is given orally then the LO must obtain the consumer's oral acknowledgment they received the disclosure and that acknowledgment must be documented and the LO must make reasonable efforts to obtain the consumer's acknowledgment in writing.

How you document that would be an internal procedure but if your forms have a signature line for the LO then it is reasonable to assume your procedures requires the LO's signature and returning them for the signature would be appropriate.

If the LO's are using the For Telephone Applications Only form for face to face applications then they are creating their own problems by using an incorrect form.
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#2067910 - 03/07/16 08:13 PM Re: Federal Credit Application Insurance Disclosure 1995Banker
JWills, CRCM Offline
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Thank you Dan. I am not sure if our new system allows more than one form. I will do some checking.
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#2068073 - 03/08/16 06:55 PM Re: Federal Credit Application Insurance Disclosure 1995Banker
ineedhelp Offline
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In addition to this insurance disclosure, does anyone provide the "Additional Insurance and third party payment addendum" when they sell credit life insurance"? Basically the form is just telling the customer that the Bank may make commission on the sale or retain a portion of the premium. This form was in Arta and we used it, but now we have switched to LaserPro and there isn't a form like this.

Thanks for your input.

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#2114591 - 01/18/17 06:22 PM Re: Federal Credit Application Insurance Disclosure ineedhelp
pjs Offline
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I have a question on the insurance disclosures. We have the Federal Credit Application Insurance disclosure at the bottom of our consumer loan application. We have a form that has both Notice of Free Choice of Agent & Insurer and Financial Institution disclosures.
The Financial Institution disclosure states "if you were to buy" and then lists what is required. We had a borrower buy credit life and a disclosure Sale of Federal Insurance popped out - at the top it says "You bought etc etc - is this disclosure required too since the borrower bought credit life or is the Financial Institution disclosure enough? Thanks so much.

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#2114596 - 01/18/17 06:45 PM Re: Federal Credit Application Insurance Disclosure 1995Banker
Dan Persfull Online
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Bloomington, IN
the form is just telling the customer that the Bank may make commission on the sale or retain a portion of the premium

Check state law for this notice requirement. I'm not aware a Federal requirement for it.


The Financial Institution disclosure states "if you were to buy" and then lists what is required.

The 343.40(a) disclosure is to be given with the initial purchase of the insurance. Providing it on the application would IMO not be compliant. You also have to have the borrower acknowledge receipt of the disclosure (both 343.40(a) & (b)) so if your combined disclosure has the applicant acknowledge the 343.40(a) disclosure you are having them acknowledge a disclosure that implies they bought the insurance when they didn't. This is my opinion only.
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#2133996 - 06/12/17 08:37 PM Re: Federal Credit Application Insurance Disclosure 1995Banker
Onehotidea Offline
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Minnesota
We have recently changed our process of getting our documents and disclosures.
We now have to date the “Insurance disclosure for credit application” for a vehicle loan at application.
Insurance Disclosure for Credit Application
Purpose
You have submitted an applicant for a loan. In connection with your loan application, lender may be soliciting, offering to sell, or will sell you an insurance product or annuity. Federal law requires lenders to provide out with the flowing disclosures.
Credit Disclosure.
1. Lender, as a condition of granting you a loan, cannot require that you purchase an insurance product or annuity from lender or any of its affiliates.
2. Lender, as a condition of granting you a loan, cannot require your agreement not to obtain or prohibits you from obtaining an insurance product or annuity from an unaffiliated entity.
There is an acknowledgment for the borrower as well as the lender; this is to be given and dated at application.

Previously we ripped off the “Federal Consumer Credit Disclosures” from the application and handed it to the consumer.

We now have the below document to sign at closing as well “Credit Insurance Disclosure”

Credit Insurance Disclosure
Voluntary credit insurance. Credit life insurance, credit disability insurance and involuntary unemployment insurance are not required to obtain credit.
By signing below, I acknowledge that I am not obtaining credit insurance for this loan for one of the flowing reasons:
A. I am not eligible for credit insurance;
B. Credit insurance is not available from lender; or
C. If I am eligible and credit insurance is available from lender, I do not want it.
Prior to signing this credit insurance notice I read and understand all the provision of this disclosure.
This is to be signed at closing.

My question… these disclosures seem to be the same and I don’t know that it is required to be signed or dated at time of application? If we make it policy to have it signed and dated at application we will be setting ourselves up to be out of compliance of our credit policy with it not being necessary. The second document has always been signed at closing.

Also our bank doesn’t even offer a credit life product so I’m trying to understand why we are required to have our customers sign it in the first place.
Any thoughts are welcome. Thank you!

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#2134031 - 06/13/17 09:13 AM Re: Federal Credit Application Insurance Disclosure 1995Banker
rlcarey Online
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If you are not selling insurance, these disclosures are meaningless.
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#2169710 - 03/22/18 08:13 PM Re: Federal Credit Application Insurance Disclosure 1995Banker
Compliance NABW Offline
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I saw in the above that RR Joker asked about selling an insurance product in association with a deposit account. I see how the 12 CFR 343.40(a) disclosure would be necessary in this circumstance. This is the disclosure that has to do with the actual selling of the insurance product and should contain the Not, Not, Not language. However, it would not seem that the 343.40(b) disclosure would be necessary, as that seems tied specifically to applications for credit.

(b) Credit disclosure. In the case of an application for credit in connection with which an insurance product or annuity is solicited, offered, or sold, you must disclose that the bank may not condition an extension of credit on either:
(1) The consumer's purchase of an insurance product or annuity from the bank or any of its affiliates; or
(2) The consumer's agreement not to obtain, or a prohibition on the consumer from obtaining, an insurance product or annuity from an unaffiliated entity.

Is that correct, or am I missing something here?

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#2268366 - 03/29/22 08:18 PM Re: Federal Credit Application Insurance Disclosure 1995Banker
bcompliance Offline
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If the bank gets indirect loans from a car dealership, is this a required disclosure? Would you want a disclosure at application and also at closing (which is usually on the note)?
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