Exam (elaborations)
CR4 - Fair Credit Reporting Act Questions and Answers 2024
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CR4 - Fair Credit Reporting Act
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CR4 - Fair Credit Reporting ActC
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Not answered. The correct answer is c. A is incorrect because only consumers must
receive risk based pricing notices. B is incorrect because risk based pricing notices
must be provided when a lender increases a consumer's rate based on a credit report.
D is incorrect because a risk-based pricing notice is not required when the lender
approves a loan on the terms requested by the consumer. - answer1. Lana, a new
lender at Loan Star Bank, is taking compliance training. What would Lana have learned
about risk-based pricing notices in her Fair Credit Reporting Act (FCRA) training?
A. Risk-based pricing notices must be provided to business customers
B. Risk-based pricing notices must be provided if, after conducting a periodic review of
a consumer's credit, a lender decreases a customer's annual percentage rate based on
information in a consumer report
C. A lender must provide a risk-based pricing notice when, based on the consumer's
credit report, the creditor provides credit to the consumer on materially less favorable
terms than it provides to other consumers
D. A risk-based pricing notice must be provided even when the lender approves the
loan on the terms requested by the consumer
B
A2F5CD20648C48EB9CF245ABCF03B6FF
Not answered. The correct answer is b. A is incorrect because one of the tasks, task 1,
violates the FCRA because it involves the sharing of 3rd party information with an
affiliate without providing an opt out. C is incorrect because the sharing of transactional
information with affiliated parties is not a consumer report and is permitted under the
FCRA. D is incorrect because only one of the tasks is considered to be a violation of the
FCRA. - answer2. During the course of your day you accomplish two tasks: (1) you call
a credit officer at an affiliate, Reliable Card Services, and describe general information
contained in a consumer report for a particular customer (the customer was not given
the opportunity to opt-out) and, (2) you respond to a call from a loan officer at your
affiliated mortgage company and describe your bank's experience with a borrower.
Which statement is true regarding these tasks?
A. Neither task violates the FCRA
B. Only task 1 violates the FCRA
C. Only task 2 violates the FCRA
D. Both tasks violate the FCRA
D
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Not answered. The correct answer is d. A, B, and C are incorrect because they do not
provide the required amount of detail. - answer3. If a bank declines an application for
, credit based on a consumer report and credit score, then which statement best
describes its responsibility to the applicant?
A. Send an adverse action notice that only states the reasons the credit was denied
B. Send a notice that explains only that a credit report was used
C. Send an adverse action notice that gives only a summary of the negative credit on
the report
D. Send an adverse action notice that states the reasons the credit was denied,
explains that a credit report was used, provides the credit score and reasons for the
score and also gives the name, address, and phone number of the credit reporting
agency
A
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Not answered. The correct answer is a. B is incorrect because you must do more than
just notify consumers that their information will be shared, you must notify consumers of
their ability to opt-out of certain types of information sharing. C is incorrect because,
although consumers may receive a free copy of their credit report annually, there is no
notification requirement for banks. D is incorrect because third party information may
not be shared unless the consumer has been given the opportunity to opt-out and has
not opted-out. - answer4. National Bank's marketing department plans to share third
party information with its mortgage and brokerage affiliates. What does the Fair Credit
Reporting Act (FCRA) require National to do before sharing the information?
A. Notify consumers of their ability to opt-out of having this information shared and
provide a reasonable means for consumers to opt-out
B. Notify consumers that their information will be shared
C. Notify consumers of their right to obtain a free copy of their credit report
D. Nothing is required; all consumer information may be shared without restriction
C
D12C3F642C064862916EEA170869BF75
Not answered. The correct answer is c. A, B, and D are incorrect. You do not have a
permissible purpose to obtain a consumer report on an individual who is not personally
liable for repayment of the loan unless the consumer has authorized the bank, in writing,
to obtain the report. - answer5. Howie Doohan, the CEO of Vinyl Resting Place, Inc.—a
company that makes vinyl-lined coffins—has come to your bank for a loan. Since he is
the CEO he is not personally liable for repayment of the loan, but your senior loan
officer wants you to obtain a credit report on Howie, anyway. What can you do?
A. You may obtain the report for safety and soundness purposes
B. You may request that Howie provide a copy a prior credit report to the bank
C. You can obtain written permission from Howie to obtain that report
D. You can obtain the report anyway, since the company is borrowing money from the
bank
D
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