Exam (elaborations)
Fair Credit Reporting Act (FCRA) Questions with solutions
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Fair Credit Reporting Act (FCRA)
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Fair Credit Reporting Act (FCRA)T or F: Consumer reporting agencies and credit bureaus perform a vital role in providing
information on consumers to lenders and companies throughout the country, which
depend on accurate, up-to-date information on everyday transactions, from issuing a
credit card to approving the purchase of a car. - answerTRUE
T or F: Until passage of the Fair Credit Reporting Act in 1970, federal laws regulating
consumer privacy fell under mortgage fair lending laws - answerFALSE. There were no
laws regulating consumer privacy before passage of the FCRA in 1970.
T or F: The FCRA requires all entities to use a consumer report when making financial
decisions - answerFALSE. The FCRA does NOT require any entity to use a consumer
report when making financial decisions.
T or F: The FCRA requires that all financial institutions obtain information from a credit
bureau when considering any loan application - answerFALSE. The FCRA governs how
the obtained information is used but does not require any business to use the services
of a credit bureau.
T or F: The FCRA requires any entity to use a consumer report when making decisions
on creditworthiness, credit capacity, character, or general reputation of consumers -
answerFALSE
The purpose of FCRA is to ensure consumer reporting agencies adopt procedures to
confirm the information they collect and dissemination is which of the following?
A. Fair and equitable to the consumer
B. Confidential
C. Accurate and relevant
D. Properly used
E. All of the above - answerE. All of the above
T or F: The FCRA governs how the credit bureau information is collected and used.
Properly used, this information serves both consumers and users - answerTRUE
T or F: Any financial institution that regularly furnishes information to a nationwide
consumer reporting agency must provide a notice to a consumer in writing prior to or no
later than 30 days after furnishing negative information to such an agency. -
answerTRUE
T or F: Regulators expect each furnisher to comply with the FCRA - answerTRUE
, The Federal Trade Commission enforces FCRA for:
A. Banks
B. Credit Unions
C. Consumer reporting agencies
D. All of the above - answerC. Consumer reporting agencies
Penalties that can be assessed for violation of FCRA include (check all that apply)
A. Civil penalties
B. Fines up to $5,000
C. Prison sentences no more than 2 years
D. Public apology to all affected - answerA, B, and C. Public apology is not one of the
penalties
T or F: Supervisory actions (penalties from the regulatory agencies can be assessed
against financial institutions that do NOT develop and maintain, as part of their
information security program, appropriate internal controls to ensure that they properly
dispose of all consumer information derived from a consumer credit report -
answerTRUE
Agencies that do not maintain a database, but assemble and merge information from
one or more nationwide consumer reporting agencies. - answerResellers
T or F: Resellers furnish such information (in the form of credit reports) to third parties -
answerTRUE
Any consumer reporting agencies that compile and maintain files on a nationwide basis
relating to a consumer's medical records or payments, residential or tenant history,
check writing history, employment history, and insurance claims - answerNationwide
Specialty Consumer Reporting Agencies
Nationwide specialty consumer reporting agencies are consumer reporting agencies
that compile and maintain special consumer files. What types of information do these
agencies compile and maintain? Check all that apply.
A. Medical records or payments
B. Residential or tenant history
C. Employment history
D. Military service records - answerA, B, and C
The FCRA governs when a consumer reporting agency (credit bureau) may furnish
reports to users of those reports. These are called? - answerPermissable purposes
Permissible purposes for a credit bureau to furnish a report:
A. In response to a court order or a subpoena from a federal grand jury
B. In response to written instructions from the consumer to whom it relates
C. To enable consideration of a request for credit or to review an existing credit
D. To assist in the collection of an outstanding obligation
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