Texas House Bill HB3448

Texas 2017 - 85th Regular

Caption

Relating to single premium term life insurance offered in connection with certain consumer loans.

Impact

The bill amends the Texas Finance Code by introducing specific disclosure requirements for lenders regarding single premium term life insurance. Lenders are required to provide a comparison between the total cost of the loan with and without the insurance, which is expected to foster informed decision-making among borrowers. This legislative change promotes consumer protection by mandating that lenders disclose any shared interests with the insurance companies offering the products, further enhancing transparency in lending practices.

Summary

House Bill 3448 aims to regulate the offering of single premium term life insurance in connection with certain consumer loans within Texas. The bill specifies that lenders may present this insurance option to borrowers, stipulating that acceptance of the insurance must not be a condition for obtaining the loan. It is designed to ensure consumers have clear choices regarding the insurance premium payments, which can be funded either by the borrower using personal funds or through a portion of the loan proceeds. This transparency is intended to protect consumers from unforeseen costs related to insurance when taking out loans.

Contention

Notable points of contention around HB3448 may arise from discussions on consumer protection versus lender flexibility. While proponents argue that clearer disclosure enhances consumer knowledge, opponents may voice concerns about potential increased costs due to the introduction of additional insurance products. There may also be discussions regarding the effectiveness of the regulation in practice, particularly about enforcement and compliance among lenders. Overall, the bill demonstrates a legislative effort to balance the interests of consumers in the financial market with the rights of loan issuers.