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
Learn how to stay competitive with new research blog from @CUNA's econ/statistics dept in Wed's #NewsNow
14 hours ago
#FOMC meeting watch: Change in forward guidance expected #Market #NewsNow http://t.co/PH41VN1j9l
16 hours ago
Member growth at #creditunion continues despite mill closure #NewsNow http://t.co/rNRjLBjvX9
17 hours ago
CA/NV league pres/CEO Dykstra in @sacbee_news: Retailers should hold accountability in data breaches http://t.co/odyHd9N2OG
18 hours ago
Fin. lit. ideas percolate during .@NW_Banking #tweetchat #NewsNow http://t.co/nSS9Iiw0e0
18 hours ago