I would appreciate some help with the following two provisions of the the new regulation regarding debt cancellation contracts.
Under the new debt cancellation requirements specifically Section 37.5 it states that "a bank may offer a customer the option of paying the fee for a contract in a single payment, provided the bank also offers the customer a bona fide option of paying the fee for that contract in monthly or other periodic payments." Does this mean that we have to offer the customer the option to pay for the debt cancellation contract in a lump sum or in periodic payments or can we simply require the lump sum payment? If the former is correct, the accounting is a nightmare, any thoughts?
Second question, Section 37.4 states "A bank may offer a customer a contract that does not provide for a refund only if the bank also offers the customer a bona fide option to purchase a comparable contract that provides for a refund." Any thoughts as to what a comparable contract is? We offer credit life insurance and debt cancellation. But, is credit life insurance a comparable contract considering the cost and terms vary greatly between the two?
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Just one more mile...