If you’re looking for something else to put on your radar, you can add ancillary products, such as GAP insurance, to the list.
Both the CFPB and FTC have indicated they’re beginning to turn more attention to these products.
The CFPB has stated that while such products aren’t currently a “big” part of an exam, questions should be expected as to 1) How the product is offered; 2) When it’s offered; 3) How disclosures are provided; and 4) The acceptance rate. If your acceptance rate is high and the product is considered “optional”, you’re probably going to have some explaining to do!
The FTC focus is primarily on how and when such ancillary products are presented, to address the risk of potential deception. For example, if customers are only told near the end of the sales process, they may feel that it’s required for the loan. Regardless, at that point, they don’t realistically have a way out without losing the time and energy they’ve invested.
We encourage you to try and get a better understanding of how and when these products are presented in connection with your loans and be prepared to answer questions about your process.
Diane joined Banker’s Compliance Consulting with over 10 years of compliance experience and over 15 years of experience within the financial industry. Diane is a Certified Regulatory Compliance Manager (CRCM) and has a Bachelor’s Degree in Sociology with a concentration in Criminal Justice. She is a graduate of the Schools of Banking Compliance School and has participated in various other training opportunities throughout her career. Diane understands firsthand the struggles banks face in building and maintaining successful compliance programs. Her experience and common sense approach to consumer compliance is a great asset to our clients.
Diane and her husband have two kids who keep them busy. She enjoys running and other sports and is a big Bugs Bunny fan! She’s a bit crazy in that she does enjoy reading some of these regulations and she’s a “crazy cat lady!” Her cat tales are hilarious!