Debt Cancellation Contracts
Question
ACME National Bank has a Web site that lists the bank's products and services. On its consumer loan page it lists debt cancellation contracts as an available product. What other disclosure must the bank place on this Web page?
Answers
Explanations
Click on the arrows to vote for the correct answer
A. B. C. D.A
Under the Consumer Financial Protection Bureau's (CFPB) rules, when a financial institution offers debt cancellation contracts as an optional product, certain disclosures are required to be provided to the consumer. The disclosure requirements are aimed at ensuring that the consumer is informed about the terms and costs of the product before they purchase it.
In this scenario, ACME National Bank is offering debt cancellation contracts on its consumer loan page on its website. Therefore, the bank is required to provide appropriate disclosures to the consumer.
Answer A is incorrect because simply listing the product is not sufficient; the bank must provide disclosures as required by the CFPB.
Answer B is incorrect because the short-form disclosures are not enough to meet the CFPB requirements. Short-form disclosures are a summary of the key features, costs, and limitations of the product, but they do not provide enough information to allow the consumer to make an informed decision.
Answer D is incorrect because the long-form disclosures are not required to be on the page. Long-form disclosures are a detailed explanation of the terms and conditions of the product and are usually provided in a separate document.
Answer C is the correct answer because the CFPB requires that short-form disclosures be available to the consumer by a conspicuous link on the page where the product is offered. The link should be easy to find and prominently displayed, so the consumer can access the necessary information before deciding to purchase the product.
In summary, when a financial institution offers debt cancellation contracts as an optional product on its website, it must provide appropriate disclosures to the consumer. The short-form disclosures should be available through a conspicuous link on the page where the product is offered to allow the consumer to make an informed decision about purchasing the product.
