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”.