The long-form disclosure must state:
(1)
The product is optional.
"Your purchase of [product name] is optional. Whether or not you purchase
[product name] will not affect your application for credit or the terms of any
credit agreement you have with the credit union."
(2)
Explanation of debt suspension
agreement. "If [product name] is activated, your duty to pay the loan
principal and interest to the credit union is only suspended. You must fully
repay the loan after the period of suspension has expired." And, if applicable:
"This includes interest accumulated during the period of suspension."
Note: This provision is applicable if the contract has a debt
suspension feature.
(3)
Amount of fee. For closed-end credit: "The total fee for
[product name] is $_______." For open-end credit, either: "The monthly fee for
[product name] is based upon your account balance each month multiplied by the
unit cost, which is $______." or "The formula used to compute the fee is
___________
(4)
Financing
the payment of the fee. "Adding the fee to the amount you borrow will
increase the cost of [product name]."
Note: This provision is applicable if the credit union offers
the option to pay the fee in a single payment. Lump-sum payment of the fee is
prohibited where the debt subject to the contract or agreement is a residential
mortgage loan.
(5)
No refund of fee paid in lump sum. "You have the option to
purchase [product name], which includes a refund of the unearned fee if you
terminate the contract or repay the loan in full prior to the scheduled
termination date. Prices of refund and no-refund products may differ."
Note: This provision is applicable if the credit union offers
the option to pay the fee in a single payment for a no-refund debt cancellation
product. This provision is prohibited where the debt subject to the contract or
agreement is a residential mortgage loan.
(6)
Refund of fee paid in lump
sum. Either: "If you pay the fee in a single payment, you may cancel
[product name] within 30 days and receive a full refund." or "If you finance
the payment of the fee as part of your loan and you pay off your loan early,
you will receive a refund of any unearned fee calculated by the actuarial
method." or "If you cancel [product name] after the first 30 days of your loan,
you will not receive a refund."
Note: This provision is applicable where the borrower pays the
fee in a single payment and the fee is added to the amount borrowed. This
provision is prohibited where the debt subject to the contract or agreement is
a residential mortgage loan.
(7)
Termination of [product
name]. Either: "You have no right to cancel [product name]." or "You
have the right to cancel [product name] in the following
circumstances:________________." And either: "The credit union has no right to
cancel [product name]." or "The credit union has the right to cancel [product
name] in the following circumstances: ________________."
(8)
Eligibility requirements,
conditions, and exclusions. "There are certain eligibility
requirements, conditions, and exclusions that could prevent you from receiving
benefits under [product name]." And either: "The following is a summary of the
eligibility requirements, conditions, and exclusions: [Summary of eligibility
requirements, conditions, and exclusions.]" or "You may find a complete
explanation of the eligibility requirements, conditions, and exclusions in
paragraph(s) ___________of the [product name] agreement."
