NCUA Okays 'Skip-A-Payment'Loans
ALEXANDRIA, Va. - (04/13/06) -- NCUA said Wednesday so-calledSkip-A-Payment loans are permissible for federal credit unions, aslong as the credit union meets Truth In Lending disclosurerequirements. A credit union's addition of an option to defer orskip a payment to an open-end loan after giving certain disclosuresmay trigger additional disclosure requirements, the agency said ina new legal opinion letter. No additional disclosures are requiredif the credit union adds the feature within 30 days after providingthe initial disclosures, and the finance charge is the same. Themember must receive additional disclosures before using the optionfor the first time if the credit union adds the option after the 30days, and it is not part of a renewal, resupply, or the originalextension of credit. Skip payment offers for closed-end creditafter the initial loan do not require additional disclosures, NCUAsaid. A credit union is proposing a Ski-A-Payment program formembers based on their credit and payment history and will charge afee for it.