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.
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The OCC had hit James Strother and other executives with civil charges a year ago in connection with the bank's phony-accounts scandal. His monetary penalty is lower than what the agency had first floated.
Federal relief efforts have minimized loan losses so far, but risks remain in credit card, auto and business lending. Many borrowers will need another lifeline to stay afloat until the economy rebounds, CEO Jamie Dimon says.