NCUA Issues Legal Opinion Letter
NCUA recently issued a legal opinion letter, which states that a federal credit union can replace credit life existing insurance with debt cancellation programs if state law and its lending contract permit the credit union to make the change.Â Read a NAFCU Today article about it here.Â (You can also access the legal opinion letter from the article.)Â Here's a link to the letter itself.
Here's my take on the letter.Â It does a good job of driving home three points:
- State insurance laws can affect federal credit unions;
- You almost always need to consult Reg Z for questions related to lending; and
- Contracts that give you flexibility are worth their weight in gold.Â (Gold, Jerry. Gold.)