It’s getting to be that time of year when some bank’s roll out holiday “skip-a-payment” programs. We recently became aware of some banks being hit with potential UDAAP violations and restitution for issues with either their program and/or disclosures. Here are a few things you will want to address to steer clear of potential UDAAP issues:
1. Do not have home loans as part of the program.
2. Have set program parameters for those eligible.
3. State an expiration or due date.
4. State clearly that interest will still accrue on the balance.
5. If credit life/disability insurance is involved, state if it will be extended.
6. Will the skip result in a higher last payment, or will the maturity be extended as well?
7. Be specific of the payment being skipped.
8. If allowed past the due date, watch out for late charges on the “skipped payment”.
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!