MCUL Comment Letter: Fed Reg on Consumer Protection Products 'Ill-conceived' (Monitor: December 22, 2010)
The MCUL is calling on the Federal Reserve Board to withdraw a proposal to enhance consumer protections and disclosures for the sale of credit protection products, calling it “ill-conceived.”
The Fed’s credit protection products amendment to Regulation Z, docket no. R-1390, is designed to make sure consumers understand their rights regarding credit protection insurance products offered by lenders, but in effect discourages borrowers from purchasing these products.
Click here to see the MCUL’s comment letter on the Fed’s proposed credit protection products rules.
The MCUL said financial institutions have been “overwhelmed by regulatory mandates and amendments over the course of the past year.
“MCUL strongly urges the Board to withdraw this proposed rule in its entirety to allow the financial institution industry to catch its collective breath, and leave it up to the Consumer Financial Protection Board to propose rules to enact the provisions of the Dodd-Frank Act,” the letter says.
The letter, signed by MCUL & Affiliates CEO David Adams, criticizes the Fed’s research firm, which surveyed just 18 people in consumer testing of the disclosures in the proposed regulation.
“It is disconcerting that such a small number of participants were chosen in order to test the proposed disclosures,” the letter says.