AFSA's State Government Affairs team has submitted a comment letter to the Kentucky Department of Revenue concerning the U-Drive-It Program. The focus of the letter is recent guidance affecting credit insurance and debt cancellation products.
The association expressed concerns about how the department interprets refund requirements under KRS 138.463. AFSA emphasized that "refunds for credit insurance and debt cancellation products must be calculated using an actuarial method or another method no less favorable to consumers." The organization highlighted the necessity for lenders and servicers to have clear guidance to ensure compliance and protect consumers' financial interests, especially in cases of early payoffs.
The absence of explicit guidance could lead to inconsistent industry practices and might expose lenders to regulatory risks. AFSA advised that the department should provide formal clarification and collaborate with the Department of Insurance to maintain consistency across related products.
Further details on this matter can be accessed through the direct advocacy section on AFSA’s website.