Fair Lending Reg U courses Oct 2020 Exam with Complete Solutions

Unmarried joint applicants learn of the credit decision on their loan two weeks after submitting a completed application. Married joint applicants receive a credit decision within 24 hours after submitting a completed application. This is an example of what type of discrimination? A. Overt disparate treatment B. Disparate treatment C. Comparative disparate treatment D. No discrimination in this scenario - ANSWER-C. Comparative disparate treatment As a director, your fair lending responsibilities include: A. Approving a written fair lending policy. B. Determining the institution's loan rates. C. Reviewing loan files for evidence of discrimination. D. None of the above. - ANSWER-A. Approving a written fair lending policy. A fair lending examination will include a review of the institution's marketing policy. A. True B. False - ANSWER-A. True The Community Reinvestment Act (CRA) requires that financial institutions do not discriminate on a prohibited basis. A. True B. False - ANSWER-B. False The purpose of the fair lending laws is to promote a fair and even-handed banking system through nondiscriminatory lending practices. A. True B. False - ANSWER-A. True Periodically reviewing the institution's fair lending program is a "best practice" for ensuring compliance. A. True B. False - ANSWER-A. True Which is a consequence of fair lending violations? A. Reputational damage from negative publicity B. Fines of over a million dollars per day C. Lawsuits by individuals and state attorneys general D. All of the above - ANSWER-D. All of the above Comparitive disparate treatment occurs when: A. A bank's policies, practices or statements openly discriminate on a prohibited basis. B. A bank treats similarly situated applicants differently on a prohibited basis. C. A bank treats similarly situated applicants the same, but due to credit history variances, one of the applicants is given preferential loan terms. D. A bank applies a credit policy or practice uniformly to all applicants, yet the policy or practice disproportionately affects a prohibited basis group. - ANSWER-B. A bank treats similarly situated applicants differently on a prohibited basis. An institution's loan policy requires cosigners for all borrowers under age 25, regardless of credit history or experience. Borrowers over age 25 only have to provide a cosigner if their credit request needs additional support. This policy is considered: A. Overt disparate treatment B. Comparative disparate treatment C. Disparate impact or effect D. No discrimination - ANSWER-C. Disparate impact or effect A lender can require the spouse of a creditworthy applicant to cosign on a loan. A. True B. False - ANSWER-B. False A review of HMDA-LAR data reveals that African-American borrowers are being charged ½ percent higher interest on average than White borrowers. There is no intent to discriminate and there is no explanation or business justification for this disparity. This would be an example of what type of discrimination? A. Overt disparate treatment B. Comparative disparate treatment C. Disparate impact D. No discrimination - ANSWER-A. Overt disparate treatment??????????? A lender provides extra assistance to non-minority applicants, but does not provide the same level of assistance to similarly qualified minority applicants. This is an example of what type of discrimination? A. Disparate impact B. Overt disparate treatment C. Comparative disparate treatment D. No discrimination - ANSWER-C. Comparative disparate treatment Which statement is FALSE? A. You can ask an applicant about marital status if the applicant requests secured credit. B. You can ask about marital status if an applicant request individual, unsecured credit and is relying on property located in a community property state as a basis for repayment. C. You can use the terms divorced or widowed to describe marital status. D. You can ask an applicant about marital status if an applicant requests individual, unsecured credit and lives in a community property state. - ANSWER-C. You can use the terms divorced or widowed to describe marital status. Randall submits a complete loan application on October 2. The lender denies the loan application on October 3. When must the lender deliver the adverse action notice? A. Within 90 days of receiving the completed loan application. B. Within 10 days of the credit decision. C. Within 30 days of the credit decision. D. Within 30 days of receiving the completed loan application - ANSWER-D. Within 30 days of receiving the completed loan application Which situation requires you to collect government monitoring information? A. A loan that is secured by and to purchase a principal residence. B. A loan that is secured by and to refinance the principal residence of the applicant. C. A closed-end mortgage loan that is secured by and to improve a dwelling. D. All of the above. - ANSWER-D. All of the above. If you take an application to purchase a dwelling over the telephone and the applicant refuses to provide government monitoring information, you must: A. Note that the information was not provided in a telephone application. B. Complete the information based on the voice and last name of the applicant. C. Leave that section of the application blank. D. None of the above. - ANSWER-A. Note that the information was not provided in a telephone application. If the individual applicant is not creditworthy, the creditor may request the spouse of the individual to be the cosigner. A. True B. False - ANSWER-B. False