New Look at Payment Protection Plans
In the past decade, banks and other financial service providers have implemented payment protection plans, which help consumers defer payment or even cancel debt based upon unemployment, illness, or death. Now, it seems that the Consumer Financial Protection Bureau (CFPB) is taking a closer look at these programs. Namely, on January 26, 2012, Discover Financial Services disclosed a federal probe of its protection plan in a company regulatory filing.
The CFPB has approached other financial service providers for information regarding programs and plans directed at consumers. Banking institutions should anticipate CFPB bank examinations that include closer scrutiny of payment protection plans.