What must a credit union disclose to a co-signer before their obligation on a loan?

A credit union must disclose to a co-signer the nature and extent of their potential liability because this information is critical for informed consent. Co-signing a loan means that the co-signer is agreeing to take on the financial responsibility for the debt if the primary borrower fails to make the required payments. This potential liability can significantly impact the co-signer's financial situation, including affecting their credit and financial stability. Therefore, it is essential that the credit union provides a clear understanding of these risks and obligations to the co-signer before they agree to sign.

The other options, while potentially informative, do not address the primary concern of liability as effectively. For instance, while disclosing the interest rate and payment schedule is important for borrowers, it is not as crucial for a co-signer who needs to understand their potential risk. The credit score impact and benefits of co-signing may also be relevant, but they do not encompass the full extent of the obligations and risks associated with becoming a co-signer. Hence, the correct focus is on clarifying the nature and extent of the liability.