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Fed CUNA continue discussions of credit insurance proposal
WASHINGTON (12/3/10)--Representatives from the Federal Reserve's Division of Consumer and Community Affairs told the Credit Union National Association on Thursday that they were interested in credit unions' concerns regarding proposed consumer disclosures for credit life insurance and credit disability insurance under the Truth in Lending Act. The Fed representatives during their meeting with CUNA Senior Assistant General Counsel Jeff Bloch, CUNA Counsel for Special Projects Michael Edwards and CUNA Mutual representatives Christopher Roe, Larry Blanchard, and Richard Fischer also expressed interest in possible alternatives to the proposed disclosures that would provide the information in a more clear and objective manner. 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. Edwards stressed that the meeting regarding the Fed's credit life and credit disability insurance proposal is part of an ongoing process, and added that the Fed indicated willingness to continue its dialogue with CUNA and CUNA Mutual. The Fed also asked for additional information about credit insurance products and the related credit insurance consumer disclosures that are currently required by State insurance regulations. Bloch added that the credit life provisions are part of a more comprehensive Regulation Z mortgage loan proposal, and CUNA during the meeting stressed to the Fed staff that these provisions are the most problematic within this proposal. Credit insurance will pay a specified amount of a consumer's loans in the event of disability 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. The Fed's proposal is open for comment until Dec. 23, and CUNA has encouraged credit unions to comment to the Fed. To comment to the Fed via CUNA's Operation Comment, use the resource link.
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