If you’ve had a question recently about calculating fees or premiums for credit insurance products connected with a residential mortgage loan or HELOC secured by the consumer’s principal dwelling, you are not alone. The Dodd Frank Act prohibits a creditor from financing directly or indirectly credit insurance for these types of loans except when the premiums or fees are calculated and paid in full on a monthly basis. However, this change will only affect qualifying loans where the credit union received an application on or after June 1, 2013. This change does not apply to current loans.
While you are discussing these changes with your data processor and insurance provider, check out CUNA’s blog for additional information and to learn more about industry advocacy efforts regarding this change.