Regulatory Alerts2005-11-21 | ISGC-2005-020-DFIWashington DFI Determination on Debt Cancellation Contracts and Debt Suspension Agreements
The Washington State Department of Financial Institutions determined that state-chartered banks, savings banks, and credit unions may offer debt cancellation contracts and debt suspension agreements without being subject to insurance licensing by the Office of Insurance Commissioner. This exemption is based on federal parity statutes that allow these institutions to exercise the incidental powers of federally chartered counterparts, thereby preempting state insurance regulation. The DFI retains authority to regulate the content, marketing, and administration of these products to ensure terms are fair, disclosures are adequate, and the safety and soundness of the institutions are not impaired.
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