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August 8, 2017

Colorado UCCC Administrator Issues Guidance on Fees for Debt Cancellation and Suspension Agreements

On August 7, 2017, the Colorado Uniform Consumer Credit Code ("UCCC") Administrator issued guidance clarifying that lenders charging fees for debt cancellation and suspension agreements must include those fees in the calculation of a finance charge.

The guidance explains that in addition to the finance charge and other charges expressly authorized by the UCCC, the UCCC Administrator has adopted rules permitting certain other charges, such as fees for Single Premium Non-Credit Insurance, Involuntary Unemployment Insurance Premiums, and Guaranteed Automobile Protection. However, because fees for debt cancellation and suspension agreements are not specified permissible charges under the UCCC nor have they been addressed by a UCCC Administrator rule, those fees must be treated as a part of the finance charge for rate calculation.

The UCCC Administrator rescinded a previous Advisory Opinion from November 9, 2004, entitled "Debt Cancellation and Suspension Agreements Offered by Colorado-Chartered Banks, Colorado-Chartered Industrial Banks, and Colorado Chartered Credit Unions." Any lender currently relying on that Advisory Opinion has 120 days to comply with the newly issued guidance.