NCUA Clarifies Stop-Loss Plans, Debt Cancellation

A federal credit union need not obtain stop-loss insurance coverage if it implements a debt cancellation program, according to NCUA. Still, such coverage may limit a credit union's exposure to losses from debt cancellation, the agency said in a new legal opinion letter. NCUA previously cleared federal credit union's to offer debt cancellation, a kind of credit insurance, as long as it acquires insurance to cover its risk of losses, under its Incidental Powers Rule.