Gov. Charles Crist of Florida signed legislation that will let state-chartered banks sell debt cancellation products to anyone at any time.
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The Republican governor signed the bill into law last week. It will take effect Oct. 1.
Previously state-chartered banks could sell these products only to their own customers, and only at the point when loans were originated. The banks could not offer the products after the loan was made or on loans bought from other lenders.
Debt cancellation products act like insurance policies. For a fee, a lender will cancel all or part of a loan if the borrower cannot pay it off in full for any number of reasons, including illness, pregnancy, or death.
