CUCE Consumer Lending Regulations UPDATED Exam Questions and CORRECT Answers
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Course
CUCE Consumer Lending Regulations
Institution
CUCE Consumer Lending Regulations
CUCE Consumer Lending Regulations
UPDATED Exam Questions and
CORRECT Answers
open-end credit - CORRECT ANSWER- consumer credit extended by a creditor under a
plan in which:
1. creditor reasonably contemplates repeated transactions
2. creditor may impose a finance charge from time to time on...
CUCE Consumer Lending Regulations
UPDATED Exam Questions and
CORRECT Answers
open-end credit - CORRECT ANSWER✔✔- consumer credit extended by a creditor under a
plan in which:
1. creditor reasonably contemplates repeated transactions
2. creditor may impose a finance charge from time to time on the outstanding unpaid balance
3. the amount of credit that may be extended to the consumer during the term of the plan is
general made available to the extent that any outstanding balance is repaid (replenishment).
Finance Charge - CORRECT ANSWER✔✔- a measure of the cost of consumer credit as a
dollar amount
Items included in finance charge - CORRECT ANSWER✔✔- 1. charges payable directly or
indirectly by the consumer and imposed directly or indirectly by the creditor incident to or as
a condition of the extension of credit.
2. fees and amounts charged by someone other than the creditor, if the creditor (a) requires
the use of a third party as a condition of or incident to the extension of credit, even if the
consumer can choose the third party, or (b) retains a portion of the third party charge, to the
extent of the portion retained.
Items excluded from finance charge - CORRECT ANSWER✔✔- * application fees
* late payment fees
* over-the-limit fees
*participation fees
* credit life/disability/debt cancellation insurance if
(1) not required to get loan and this is disclosed
(2) premium disclosed as unit cost (open) or total cost (closed)
(3) member signs or initials request for coverage
* property insurance: must obtain, from any provider acceptable to credit union; if buying
from credit union, the premium is disclosed
,Annual Percentage Rate (APR) - CORRECT ANSWER✔✔- the measure of the cost of
credit, expressed as a yearly rate. Function of: the amount financed, the finance charge, and
the payment schedule
APR accuracy requirements - CORRECT ANSWER✔✔- 1/8% (above or below) Closed-end:
also 1/4% for irregular
Finance charge (closed end only): $5 if <$1,000 financed; $10 if more than $1,000 financed
Closed-end credit - CORRECT ANSWER✔✔- features:
* a set amount borrowed
* a set term or maturity date
Note: all credit other than open-end
Advertising Disclosures: Open-End - CORRECT ANSWER✔✔- If any trigger terms
disclosed, must also disclose:
* any minimum, fixed, transaction, activity, or similar charge
* any periodic rate that may be applied, expressed as an APR
* any membership or participation fee
APR on electronic application must have been in effect w/in last 30 days
Advertising Disclosures: Closed-End - CORRECT ANSWER✔✔- If trigger term used, must
also disclose:
* the amount or percentage of the down payment
* terms of repayment, reflecting repayment obligations over the full term of the loan
* APR, and if the rate may increase after consummation, that fact
Trigger term - CORRECT ANSWER✔✔- For open-end credit, any credit term required to be
disclosed in an initial disclosure statement. (includes APR)
For closed-end credit: (does NOT include APR)
*amount or percentage of any down payment
*number of payments or repayment method
, * amount of any payment
* amount of any finance charge
Account opening disclosures: open-end - CORRECT ANSWER✔✔- Required components:
* account opening table
* disclosures below the table
* all charges imposed as part of the plan
* rates
ECOA/Reg B Protected Classes - CORRECT ANSWER✔✔- 1. Gender
2. Race
3. Color
4. National Origin
5. Age
6. Religion
7. Marital status
8. Income derived from public assistance program
9. Good Faith exercise of rights under Consumer Credit Protection Act
ECOA/Reg B Effects test for disparate treatment/impact - CORRECT ANSWER✔✔- 1. loan
criteria or practice has a disproportionate impact on the protected class, regardless of intent
2. legitimate business need for criteria or practice as valid predictor of loan performance
3. alternative criteria or practice available with less adverse impact
ECOA/Reg B: Circumstances where spousal information is appropriate - CORRECT
ANSWER✔✔- 1. Where the spouse will be contractually liable for, or a user of, the account
2. Where the member is relying on the spouse's income to pay the debt
3. Where member lives in a community property state or where collateral securing the loan is
in a community property state
4. Where alimony or child support is being relied upon as a source of repayment
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