NCUA Says CUs Must Allow Members To Opt-In When Converting Credit Life Insurance
ALEXANDRIA, Va. – NCUA said amendments to the Fed’s Reg Z, the Truth In Lending Act, now requires credit unions to provide members with an opt-in option when they convert credit life insurance to voluntary debt cancellation coverage.
In a new legal opinion, NCUA said a credit union must obtain an affirmative written request from the member to convert a credit life policy to a debt cancellation or can obtain an affirmative oral request by telephone.
These disclosure and consent requirements apply when voluntary debt cancellation coverage is “written in connection” with the credit transaction,” said the legal opinion.
The legal opinion was provided to SWBC of San Antonio, which provides the credit insurance products for credit unions.