NU Online News Service, Sept. 10, 12:30 p.m. – Computer Sciences Corp., El Segundo, Calif., is introducing a service to help banks and other financial institutions to add debt protection programs to consumer loans.
Traditionally, many lenders have recommended that consumers buy credit life insurance or credit disability insurance to protect themselves and their estates against the effects of unexpected personal disasters. But consumer activists have attacked the credit life and credit disability insurance programs, arguing that they are a bad deal for consumers.
The U.S. Office of the Comptroller of the Currency has recently given OCC-regulated financial institutions permission to sell debt protection programs of their own, without the participation of credit insurers.
The CSC service offers the actuarial, administration and back-office support services banks need to set up the debt protection programs, CSC says in a statement announcing its service.
The new CSC debt protection service “increases fee income for banks while eliminating their need to contract with insurers for such services,” CSC says.
CSC is running the debt protection service on its own computers, so banks should not need to buy any hardware or software to use the service, CSC says.
CSC says its service can handle debt protection programs for automobile loans and leases, consumer lending, first mortgages, other real estate-secured loans and credit cards.