Loan Disclosure Requirements

[exmember]

What is the name of your state? Kentucky

I have been a member of a Federal Credit Union for 14 years. I have had multiple transactions without incident until recently. I purchased a vehicle with a reasonable interest rate with a 48 month term. Being 1/2 way through the loan, I was perplexed to realize that my principal balance was too large to be satisfied by the remaining months and payments of the agreement. Upon contacting the Credit Union, I was informed that both life insurance and disability insurance have been added to the loan balance every month and accruing interest in excess of $2,000.00. The loan agreement does not have these amounts or insurances listed. For "proof" that I had agreed to purchase this insurance, the Credit Union produced a copy of a loan from 2002 to which I did in fact purchase both insurances. The loan was specific to that vehicle and has been paid in full for 2 years. Can the Credit Union charge me for insurance that I did not approve for this specific loan? Is the Credit Union required to disclose all additions to the loan on the loan agreement? Is the Credit Union within their rights to increase the term and principal of the loan for insurance without notification?

Thanks,
Tracy

[Ladynred]

Can the Credit Union charge me for insurance that I did not approve for this specific loan?

No. If the insurance wasn't part of the original loan documents then they can't add it because they feel like it.

Is the Credit Union required to disclose all additions to the loan on the loan agreement?

Yes - see the Truth in Lending Act !

Is the Credit Union within their rights to increase the term and principal of the loan for insurance without notification?

No. This type of loan is a FIXED term with a fixed interest rate. They can NOT do as they please.

I would suggest you take this to a consumer attorney.