DFI-CU 74.07 NoteNote: Copies of the short and long form, and instructions for using them may be obtained by writing to the Office of Credit Unions, P.O. Box 14137, Madison, WI 53708-0317 or by downloading it from the Department of Financial Institutions’ website, www.wdfi.org. DFI-CU 74.07(3)(3) Disclosure requirement, and timing and method of disclosures. DFI-CU 74.07(3)(a)(a) Short form disclosures. The credit union shall make the short form disclosures orally at the time the credit union first solicits the purchase of a contract. DFI-CU 74.07(3)(b)(b) Long form disclosures. The credit union shall make the long form disclosures in writing before the customer completes the purchase of the contract. If the initial solicitation occurs in person, the credit union shall provide the long form disclosures in writing at that time. DFI-CU 74.07(3)(c)(c) Transactions by telephone. If the contract is solicited by telephone, the credit union shall provide the short form disclosures orally and shall mail the long form disclosures, and, if appropriate, a copy of the contract to the customer within 3 business days, beginning on the first business day after the telephone solicitation. DFI-CU 74.07(3)(d)(d) Solicitations using written mail inserts or “take one” applications. If the contract is solicited through written materials such as mail inserts or “take one” applications, the credit union may provide only the short form disclosures in the written materials if the credit union mails the long form disclosures to the customer within 3 business days, beginning on the first business day after the customer contacts the credit union to respond to the solicitation, subject to the requirements of s. DFI-CU 74.08 (3). DFI-CU 74.07(3)(e)(e) Electronic transactions. Disclosures described in this section provided through electronic media shall be in a manner consistent with the requirements of the Electronic Signatures in Global and National Commerce Act, 15 USC 7001 et seq. DFI-CU 74.07(4)(a)(a) Understandable disclosures. The disclosures required by this section shall be conspicuous, simple, direct, readily understandable, and designed to call attention to the nature and significance of the information provided. DFI-CU 74.07(4)(b)(b) Meaningful disclosures. The disclosures required by this section shall be in a meaningful form. DFI-CU 74.07 NoteNote: The following are examples of means that call attention to the nature and significance of the information provided in the disclosure: a plain language heading to call attention to the disclosures; typeface and type size that are easy to read; wide margins and ample line spacing; boldface or italics for key words; and distinctive type style, and graphic devices, such as shading or sidebars, when the disclosures are combined with other information.
DFI-CU 74.07(5)(5) Advertisements and other promotional material for debt cancellation contracts and debt suspension agreements. The short form disclosures are required in advertisements and promotional material for contracts unless the advertisements and promotional materials are of a general nature describing or listing the services or products offered by the credit union. DFI-CU 74.07 HistoryHistory: CR 05-046: cr. Register January 2006 No. 601, eff. 2-1-06. DFI-CU 74.08DFI-CU 74.08 Affirmative election to purchase and acknowledgement of receipt of disclosures required. DFI-CU 74.08(1)(1) Affirmative election and acknowledgement of receipt of disclosures. Before entering into a contract the credit union shall obtain a customer’s written affirmative election to purchase a contract and written acknowledgement of receipt of the disclosures required by s. DFI-CU 74.07 (2). The election and acknowledgement information shall be conspicuous, simple, direct, readily understandable, and designed to call attention to their significance. The election and acknowledgement satisfy these standards if they conform with the requirements in s. DFI-CU 74.07 (2). DFI-CU 74.08(2)(2) Telephone solicitations. If the sale of a contract occurs by telephone, the customer’s affirmative election to purchase may be made orally, provided the credit union does all of the following: DFI-CU 74.08(2)(a)(a) Maintains sufficient documentation to show that the customer received the short form disclosures and then affirmatively elected to purchase the contract. DFI-CU 74.08(2)(b)(b) Mails the affirmative written election and written acknowledgement, together with the long form disclosures required by s. DFI-CU 74.07, to the customer within 3 business days after the telephone solicitation, and maintains sufficient documentation to show it made reasonable efforts to obtain the documents from the customer. DFI-CU 74.08(2)(c)(c) Permits the customer to cancel the purchase of the contract without penalty within 30 days after the credit union has mailed the loan form disclosures to the customer. DFI-CU 74.08(3)(3) Solicitations using written mail inserts or “take one” applications. If the contract is solicited through written materials such as mail inserts or “take one” solicitations and the credit union provides only the short form discourses in the written materials, then the credit union shall mail the acknowledgment of receipt of disclosures, together with the long form disclosures required by s. DFI-CU 74.07, to the customer within 3 business days, beginning of the first business day after the customer contacts the credit union or otherwise responds to the solicitation. The credit union may not obligate the customer to pay for the contract until after the credit union has received the customer’s written acknowledgment of receipt of disclosures unless the credit union does all of the following: DFI-CU 74.08(3)(a)(a) Maintains sufficient documentation to show that the credit union provided the acknowledgement of receipt of disclosures to the customer as required by this section. DFI-CU 74.08(3)(b)(b) Maintains sufficient documentation to show that the credit union made reasonable efforts to obtain from the customer a written acknowledgement of receipt of the long form disclosures. DFI-CU 74.08(3)(c)(c) Permits the customers to cancel the purchase of the contract without penalty within 30 days after the credit union has mailed the long form disclosures to the customer. DFI-CU 74.08(4)(4) Electronic election. An affirmative election and acknowledgement made electronically shall be in a manner consistent with the requirements of the Electronic Signatures in Global and National Commerce Act, 15 USC 7001 et seq. DFI-CU 74.08 HistoryHistory: CR 05-046: cr. Register January 2006 No. 601, eff. 2-1-06. DFI-CU 74.09DFI-CU 74.09 Safety and soundness. A credit union shall manage the risks associated with debt cancellation contracts and debt suspension agreements in accordance with safety and soundness principles. A credit union shall establish and maintain effective risk management and control processes over its debt cancellation contracts and debt suspension agreements. The processes include appropriate recognition and financial reporting of income, expenses, assets and liabilities, and appropriate treatment of all expected and unexpected losses associated with the products. A credit union shall assess the adequacy of its internal control and risk mitigation activities in view of the nature and scope of its debt cancellation contract and debt suspension agreement programs. The director may limit, restrict or prohibit a credit union from providing debt cancellation contracts and debt suspension agreements if examination results indicate that the credit union is conducting its business in an unauthorized or unsafe manner or is violating any of the provisions of this chapter.
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Chs. DFI-CU 51-75; Department of Financial Institutions-Credit Unions
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