Current through Register Vol. 18, September 20, 2024
(1) Before entering
into a debt cancellation contract or debt suspension agreement, a credit union
shall obtain the member's written affirmative election to purchase the contract
and a written acknowledgment of receipt of the disclosures required under ARM
2.59.408.
(2) The election and acknowledgment
information must be conspicuous, simple, direct, readily understandable, and
designed to call attention to its significance.
(3) The election and acknowledgment
information satisfies these standards if it conforms to the following
requirements:
(a) if the sale of a contract
occurs by telephone, the member's affirmative election to purchase may be made
orally, provided that the credit union:
(i)
maintains sufficient documentation to show that the member received the
short-form disclosures substantially similar to ARM
2.59.413(1) and
then affirmatively elected to purchase the contract;
(ii) mails to the member the affirmative
written election and written acknowledgment together with a long-form
disclosure substantially similar to ARM
2.59.413(2),
within three business days after the telephone solicitation, and maintains
sufficient documentation to show it made reasonable efforts to obtain the
documents from the member; and
(iii) permits the member to cancel the
purchase of the contract without penalty within 30 days after the credit union
has mailed the long-form disclosures to the member; or
(b) if the contract is solicited through
written materials such as mail inserts or "take one" applications and a credit
union provides only the short-form disclosures in the written materials, then
the credit union shall mail the acknowledgment of receipt of disclosures,
together with a long-form disclosure as provided under ARM
2.59.413(2), to
the member within three business days, beginning on the first business day
after the member contacts the credit union or otherwise responds to the
solicitation. A credit union may not obligate the member to pay for the
contract until after the credit union has received the member's written
acknowledgment of receipt of disclosures unless the credit union:
(i) maintains sufficient documentation to
show that the credit union provided the acknowledgment of receipt of
disclosures to the member;
(ii)
maintains sufficient documentation to show that the credit union made
reasonable efforts to obtain from the member a written acknowledgment of
receipt of the long-form disclosures; and
(iii) permits the member to cancel the
purchase of the contract without penalty within 30 days after the credit union
has mailed the long-form disclosures to the member.
(4) The affirmative election and
acknowledgment may be made electronically in a manner consistent with the
requirements of the Electronic Signatures in Global and National Commerce Act,
15 USC
7001 et seq. or the Uniform Electronic
Transaction Act, Title 30, chapter 18, part 1, MCA.
