Exam (elaborations)
Fair Credit Reporting Act Questions and Answers 100% Correct
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Fair Credit Reporting Act
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Fair Credit Reporting ActFriendly Service Bank has an affiliated insurance company, FSB Insurance. In which of
the following cases would the consumer receiving the marketing materials have to have
received the affiliate marketing opt-out opportunity? - answerFSB Insurance receives
individualized credit score information from Friendly Service Bank about the bank's loan
customers. After selecting eligible customers from the list, FSB Insurance sends a
qualified list back to Friendly Service Bank who sends the FSB Insurance marketing
materials to the selected bank customers.
First National Bank has denied a credit application from Mr. Johnson because the
application scored too low on the bank's internal credit-scoring system. Mr. Johnson's
credit report, received from a credit reporting agency, scored a 4 out of a possible 10.
Other parts of Mr. Johnson's application received low scores also. Which statement best
describes First National's responsibility to Mr. Johnson under the Fair Credit Reporting
Act? - answerSend an adverse action notice that states that a credit report was used
and gives the name and address of the credit reporting agency
Mrs. Williams applies to rent an apartment from Better Living Apartments. She has been
a customer of First National Bank for several years, so she lists the bank as a credit
reference. Better Living sends the bank a credit inquiry letter, and the bank sends Better
Living a list of Mrs. Williams's bank transactions. The report states that she has had
several insufficient checks on her account over the last two months and that she has
satisfactorily paid off a car loan. Better Living calls the bank and speaks to Consumer
Loan Officer George Dillon. Mr. Dillon states that Mrs. Williams applied for a loan three
months ago, and he denied the loan because of a slow-pay report from ABC
Department Store that appeared on Mrs. Williams's credit report. Did the bank give
Better Living a consumer report under the Fair Credit Reporting Act? - answerYes. The
bank gave credit information it received from another source.
Mr. Hilliard applied to First National Bank for a car loan. The bank requested a credit
report on Mr. Hilliard from the local credit reporting agency and found that he had
almost no credit. No negative items were on the report. In addition, Mr. Hilliard had been
employed at his job for four months and his previous work experience was difficult to
verify. The bank denied his application for a loan and sent him an adverse action notice.
What should the bank do under the Fair Credit Reporting Act? - answerNotify Mr.
Hilliard that a credit report was obtained and give him the name and address of the
credit bureau.
-Fair Credit Reporting Act, Section 615(a) and 15 USC CH41 1861m Outline III A(1)
That information on the credit report was partially responsible for the credit denial gives
rise to the responsibility to report it to the consumer. Even too little credit history is
enough reason to report under the Fair Credit Reporting Act. In addition, under ECOA's
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