*** Bug 1356706 has been marked as a duplicate of this bug. ***
Ronnie, You can deploy a VM and verify that cloud-init did apply the settings, or look at the fog.log and Base64 decode the "user_data" and verify that it matches the content of your cloud-init script (isn't another Base64 encoded string).
Verified in 5.6.1.2
Since the problem described in this bug report should be resolved in a recent advisory, it has been closed with a resolution of ERRATA. For information on the advisory, and where to find the updated files, follow the link below. If the solution does not work for you, open a new bug report. https://rhn.redhat.com/errata/RHSA-2016-1634.html