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
Housing starts swell in July #NewsNow #Market http://t.co/EdKIhXEj9l
12 hours ago
Consumer inflation tapers after spring surge #NewsNow #Market http://t.co/bgvQd8fyuF
12 hours ago
Have you read this one today in #NewsNow? What NCUA examiners look for on cybersecurity efforts: NCUA Report http://t.co/4g5wUavUAe
13 hours ago
.@CFPB sets $2.75M fine v. auto finance co. it says "distorted consumer credit records for years": TX-based First Investors Fin. Serv. Group
14 hours ago
University, college #creditunions add fin ed to higher ed. See #NewsNow http://t.co/NsyshwHPhg
15 hours ago