Banking & Finance  September 27, 2021

BBVA, Air Academy Federal Credit Union to refund borrowers’ GAP fees

DENVER — BBVA USA and Air Academy Federal Credit Union will refund Colorado borrowers after failing to return unfairly withheld guaranteed automobile protection (GAP) insurance fees, Colorado Attorney General Phil Weiser announced Monday.

BBVA and Compass Bank, which was acquired by the Spanish institution in 2008, will pay Colorado drivers about $1.68 million in unreturned GAP fees. Air Academy Federal Credit Union is still determining its refund total.

GAP insurance “is an add-on product sold to car buyers who finance their purchases,” according to a news release from the Attorney General’s office. “If a buyer’s car is totaled in an accident, the buyer’s auto insurance typically pays only the fair market value of the car, which can be less than the amount owed on the buyer’s loan. GAP applies in that situation to cancel, or pay off, the remaining balance owed on the loan. If a borrower pays off the loan early, or the car is repossessed before the loan is paid off, Colorado law requires that the lender automatically refund borrowers any unearned GAP payments — that is, funds that are not paying for any service of value to consumers.”

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Earlier, Wells Fargo Bank NA agreed to pay more than $9.5 million to 51,434 Coloradans to settle a multi-state lawsuit brought by GAP insurance holders.

“We are committed to protecting hard-working Coloradans, especially from unfair, deceptive, and illegal practices that cause them stress, hardship, and financial losses,” Weiser said in a prepared statement. “I am pleased that this money will be returned to Colorado residents and service members who paid for GAP when they purchased a vehicle. We will continue demanding compliance from lending institutions in Colorado to protect all consumers.”

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DENVER — BBVA USA and Air Academy Federal Credit Union will refund Colorado borrowers after failing to return unfairly withheld guaranteed automobile protection (GAP) insurance fees, Colorado Attorney General Phil Weiser announced Monday.

BBVA and Compass Bank, which was acquired by the Spanish institution in 2008, will pay Colorado drivers about $1.68 million in unreturned GAP fees. Air Academy Federal Credit Union is still determining its refund total.

GAP insurance “is an add-on product sold to car buyers who finance their purchases,” according to a news release from the Attorney General’s office. “If a buyer’s car is totaled in an accident,…

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