The Comptroller's office is revising its rules to make it clearer that bank insiders aren't allowed to profit from selling credit life insurance to bank customers.
The proposal, published in Wednesday's Federal Register, is part of the Office of the Comptroller of the Currency's campaign to simplify its regulations. It does not substantively alter the agency's credit life insurance rules.
"I have said we're doing a top-to-bottom, A-to-Z review of our regulations," said Comptroller Eugene A. Ludwig. "Today's regulation marks the 21st out of 29 regulations that we have acted on so far."
Credit life insurance pays off a loan if the borrower dies or is incapacitated before it is repaid.
The new regulation removes many of the detailed descriptions and examples in the current rule and states simply that bank directors, officers, employees, and shareholders owning 5% or more of the bank's stock aren't allowed to retain commissions or otherwise profit from the sale of credit life insurance to the bank's customers.
Comments on the proposed regulation are due Nov. 13.