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.
Published
2017/10/06
Diane Dean