For certain consumer credit transactions for which a creditor receives an application on or after June 1, 2013, the Consumer Financial Protection Bureau (CFPB) amended Regulation Z by adding Section 1026.36 (i) prohibiting the financing of single-premium credit insurance (see our memorandum dated April 10, 2013). The effective date of Section 1026.36(i) was scheduled to be June 1, 2013, but the CFPB by final rule issued today has delayed its effective date until January 10, 2014. The text of Section 1026.36(i) is reprinted below: (i) Prohibition on financing single-premium credit insurance. (1) A creditor may not finance, directly or indirectly, any premiums or fees for credit insurance in connection with a consumer credit transaction secured by a dwelling (including a home equity line of credit secured by the consumer’s principal dwelling). This prohibition does not apply to credit insurance for which premiums or fees are calculated and paid in full on a monthly basis. (2) For purposes of this paragraph (i), ”credit insurance”: (i) Means credit life, credit disability, credit unemployment, or credit property insurance, or any other accident, loss-of-income, life, or health insurance, or any payments directly or indirectly for any debt cancellation or suspension agreement or contract, but See attached for complete memorandum
