1. (1) A depository institution may not extend credit nor alter the terms or conditions of an extension of credit conditioned upon the customer entering into a debt cancellation agreement or debt suspension agreement with the depository institution.
2. (2) A depository institution may not engage in any practice or use any advertisement that could mislead or otherwise cause a reasonable person to reach an erroneous expectation with respect to information that must be disclosed under this rule.

3. (3) Prohibited contract terms. A depository institution may not offer debt cancellation agreements or debt suspension agreements that contain contract terms:

   1. (a) Giving the depository institution the right unilaterally to modify the agreement unless:

      1. (i) The modification is favorable to the customer and is made without additional charge to the customer; or
      2. (ii) The customer is notified of any proposed change and is provided a reasonable opportunity to cancel the agreement without penalty before the change goes into effect; or
   2. (b) Requiring a lump sum, single payment for the agreement payable at the outset of the agreement, where the debt subject to the agreement is a residential mortgage loan.

KEY: financial institutions, debt cancellation, debt suspension

Date of Last Change: October 15, 2003

Notice of Continuation: October 5, 2023

Authorizing, and Implemented or Interpreted Law: 7-1-324(2)