Credit Insurance Financing Prohibition Delayed
The provision would've taken effect June 1.
In May, the CFPB delayed the effective date of its prohibition on creditors financing credit insurance premiums in connection with consumer credit transactions secured by a dwelling (including home equity lines of credit secured by a consumer’s principal dwelling).
CUNA formally requested the delay so the CFPB could clarify certain issues and provide more time for credit unions to implement changes.
The provision would’ve taken effect June 1, but the CFPB issued a proposal to suspend that effective date while it seeks comment on clarifications to how the Dodd-Frank Act prohibition applies to credit insurance products with certain periodic payment features.
The prohibition now will take effect on Jan. 10, 2014, along with regulations implementing other Dodd-Frank Act mortgage provisions.
The CFPB will announce the revised effective date of the prohibition when it issues the proposed credit insurance clarifications for public comment.