Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

Washington
CUNA to meet with Fed on credit life insurance concerns
WASHINGTON (12/2/10)-Representatives from the Credit Union National Association (CUNA) and CUNA Mutual will discuss proposed credit insurance disclosures with the Federal Reserve this morning as part of its ongoing effort to address concerns regarding Regulation Z changes. The meeting will cover credit union concerns regarding the Fed's comprehensive proposal that would impose new consumer disclosures for credit life insurance and credit disability insurance under the Truth in Lending Act. Similar disclosures are currently required by State authorities, as insurance usually falls under state jurisdiction. CUNA and CUNA Mutual have criticized the proposed Fed disclosures, saying that they go well beyond ensuring that consumers are informed about these products, instead casting these products in a strictly negative light, and strongly discouraging consumers from purchasing them. CUNA Senior Assistant General Counsel Jeff Bloch said that the credit life insurance proposal is “the most problematic part” of a comprehensive Fed mortgage loan proposal. Previously, the U.S. Internal Revenue Service questioned whether credit life insurance products and other related products were "substantially related" to credit unions' tax exempt purpose -- and should therefore be subject to Unrelated Business Income Taxation (UBIT) -- by arguing that these products were overpriced relative to theoretical alternative products. However, both federal courts which have reviewed the IRS's position concluded that credit insurance products promoted thrift and therefore should not be subject to UBIT. Credit insurance will pay a specified amount of a consumer's loans in the event of injury or death. Consumers have received an estimated $2 billion in benefits from credit insurance group products over the past five years, according to industry data. CUNA through a grassroots operation called "Operation Comment," is encouraging credit unions to report their concerns with the proposals to the Fed. CUNA Mutual has also taken on a similar operation. CUNA and CUNA Mutual will also hold an audio conference on these disclosures on Dec. 8. For more on the audio conference, use the resource link.
Other Resources

RSS print
News Now LiveWire
Stay tuned for coverage of @CUNA's BSA conference which starts Sunday. #CUNABSA #CUNACompliance
1 Day ago
Today's the last day to complete @CUNA's Home Depot data breach survey http://t.co/UcB8G9bVXe #StoptheDataBreaches
1 Day ago
Brenda Davis of Cross Roads Ministries will walk through 83 communities during the Ending Hunger Walking tour. (2 of 2)
1 Day ago
The Ending Hunger Walking tour, coordinated by the Maine CU League, kicked off at Old Maine CU in Augusta today. (1 of 2)
1 Day ago
Darwin Brokke of Citizens Community CU represented the #CU Association of Dakotas at a housing summit hosted by @SenatorHeitkamp
1 Day ago