§ 37.4 Refunds of fees in the event of termination or prepayment of the covered loan.
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Verbatim text below is from the Electronic Code of Federal Regulations (eCFR), a public-domain U.S. government work. Always verify the current version with the eCFR before relying on it for any legal matter.
Full Text
Refunds.bona fide(a) If a debt cancellation contract or debt suspension agreement is terminated (including, for example, when the customer prepays the covered loan), the bank shall refund to the customer any unearned fees paid for the contract unless the contract provides otherwise. A bank may offer a customer a contract that does not provide for a refund only if the bank also offers that customer a option to purchase a comparable contract that provides for a refund.
Method of calculating refund.(b) The bank shall calculate the amount of a refund using a method at least as favorable to the customer as the actuarial method.
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