Effective Date for Prohibition on Financing Single-Premium Credit Insurance Delayed

On May 29, 2013, the CFPB issued a final rule to delay the effective date of the prohibition on financing single-premium credit insurance from June 1, 2013, to January 10, 2014.  This prohibition applies to closed-end transactions secured by a dwelling and open-end plans secured by a consumer’s principal dwelling.

The Bureau intends to use the time to clarify how the prohibition impacts transactions other than those in which a lump-sum premium is added to the loan amount.  The Bureau plans to issue a proposal for public comment shortly.

Diane Dean

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