CRCM Questions And Answers With Verified Study Solutions
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Course
CRCM
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CRCM
CRCM Questions And Answers With Verified Study Solutions
In which of the following transactions is a disclosure statement to the consumer required? ANS A $125,000 loan to purchase and secured by an unimproved lot on which the borrower eventually plans to build a home for retirement
Which of th...
CRCM Questions And Answers With Verified Study
Solutions
In which of the following transactions is a disclosure statement to the consumer required? ANS A
$125,000 loan to purchase and secured by an unimproved lot on which the borrower eventually plans to build a
home for retirement
Which of the following charges is generally to be a prepaid finance charge? ANS Points paid by the
borrower in cash at closing
Which of these transactions requires the earliest disclosure? ANS A $200,000 loan with a variable interest
rate to purchase a residence
If an advertisement for a lender's mortgage loan product states that "we offer 15 and 30 year loans," what
additional disclosures are required by Regulation Z? ANS The terms repayment, amount of the down
payment (in a credit sale), and the APR
For how long must a lender retain evidence of compliance with the Truth in Lending Act? ANS Two years
after the disclosures are required to be made, except for mortgages, which have a five year retention
requirement
Which of the following closed-end loans is subject to the right of rescission? ANS A home improvement
loan for the borrower's principal dwelling, secured by the dwelling
For how long may consumers exercise the right to rescind transactions in closed-end loans? ANS Three
business days after the later of the consummation, delivery of notice of the right to rescind, or delivery of
required disclosures
Which of the following disclosures is NOT required on the itemization of amount financed? ANS An
itemization of the various types of finance charges
Borrower A has a variable rate loan secured by his principal dwelling for a term of 10 years. Which of the
following is NOT a Truth in Lending requirement for his loan? ANS Limiting the number of interest rate
increases in each calendar year
,The State National Bank credit card program includes an annual fee that equals a percentage of the average
balance of the account during the previous year. Of the following statements, which is true regarding the Truth
in Lending requirements applicable to this fee? ANS The bank must disclose in the initial application or
solicitation either the fee amount or the percentage amount and identify the amount against which the
percentage is based
Which statement is NOT true regarding the application disclosure made by the lender on a home equity open-
end plan? ANS Disclosure must be in a form the borrower can keep
In an open-end account that is NOT a home equity plan, which of the following does NOT have to provided to
the consumer? ANS A brochure with a transaction example of $1,000 balance for six months
When must a notice be received from a consumer in order to be considered a "billing error notice"? ANS
Within 60 days after the first statement that reflected the error
Which statement is true regarding a consumer's right to rescind an open-end credit transaction? ANS Right
of rescission applies only to transactions secured by the consumer's principal dwelling
When a bank makes a rescindable closed-end home improvement loan to a consumer, to which of the
following may the bank advance funds before the end of the rescission period? ANS To an escrow account
with a third-party escrow agent
First National Bank agreed to make a rescindable closed-end home improvement loan to Mr. and Mrs. Smith.
The Notice of the Right to Rescind was given to the Smiths on Tuesday at the closing of the loan along with
the material disclosures. The Smiths purchased a title policy and paid for a property appraisal for the bank in
connection with the transaction. A lien was filed against the Smiths' home on Tuesday afternoon. The bank
funded the loan on Friday morning at the request of Mr. Smith by crediting the Smiths' joint checking account
with the loan proceeds. On Friday afternoon Mrs. Smith has a change of heart concerning the transaction and
deposits a rescission notice in the mail to the bank. The bank receives the notice on Tuesday morning. All
funds have been withdrawn from the account. What should the bank do? ANS Release the lien on the
property immediately, then refund to the Smiths the amounts they spend for the title policy and appraisal, and
then demand repayment of the loan (without interest)
A consumer customer reports to First National Bank's credit card department that his credit card periodic
statement contains an amount that is incorrect. What should the bank do? ANS Conduct an investigation
and mail within 30 days an acknowledgement of the error notice, a correction of the error, or a notice that there
is no error
,If a bank completes an investigation of an alleged billing error and determines that no billing error occurred
and the consumer owes all or part of the amount, what must the bank do? ANS Send the consumer a notice
that explains why no billing error occurred
Which of the following situations is NOT considered a billing error? ANS The inclusion of a change for an
item the quality of which dissatisfied the consumer
For which disclosure must a bank obtain a customer's affirmative consent before delivery? ANS An
electronic disclosure statement on a car loan
What must a married couple do to waive their right of rescission on their residential property? ANS Sign a
written statement indicating the reason for the waiver
A creditor receives a phone application for a home equity line of credit. Before the time period for mailing out
the early disclosure and the Regulation Z mandated brochure, the creditor reviews the applicant's credit history
and discovers the applicant will not qualify for the line of credit due to a bankruptcy filing last year. Which of
the following BEST describes how Regulation Z treats this situation? ANS If the credit denial was made
within the period of time Regulation Z allows for mailing the early disclosures and brochure, the creditor does
not have to send the early disclosures or the brochure
In determining a prepaid finance charge for a final APR calculation, a compliance officer notes an unusual
settlement agent fee. What should the compliance officer FIRST determine? ANS Whether the fee is
charged in a comparable cash transaction
On January 10 ABC Bank decides to send an advertising piece to consumers in its local community to promote
its home equity lines of credit. The ad will be sent via email. The bank's home equity product has an interest
rate based upon the national prime rate plus a five percentage margin. However, the bank is offering a lower
promotional interest rate that is fixed for six months. In the ad, the bank plans to disclose the promotional rate
and the fact that it is valid for six months from the date of loan closing. The bank will also disclose an actual
APR charged on this product during the previous November. The ad will also include a list of all the fees
required to close the loan and the maximum APR that can be charged under the plan. Will this ad meet TILA
requirements? ANS No, the ad must disclose a rate used during the 30 days before the date the ad is
transmitted
Which of the following features is acceptable in a high cost mortgage loan? ANS A prepayment payment
penalty provision effective for the first year of the loan
, If a loan is to be secured by a consumer's principal dwelling, which of the following actions is prohibited with
regard to an appraiser? ANS The banker tells the appraiser that the appraisal will need to show that the
property is worth at least $100,000, or the bank will not be able to make the loan.
How must a card issuer disclose a minimum payment on a periodic statement for an open-end credit account
that is not home secured? ANS By disclosing the estimated monthly payment for repaying in 36 months
When credit card checks accessing open-end accounts (not home secured) are sent to a borrower and the
finance charge terms are different than originally disclosed, when must the disclosures be displayed
prominently on the front page of the check? ANS When provide more than 30 days after the account is
opened
If a bank is charging a premium rate in a credit card solicitation, how must it disclose this rate? ANS In 16
point type
A bank's compliance officer received a complaint from a credit card customer indicating that she received her
credit card statement and noted that her credit limited had been reduced to less than the balance she owes. She
claims that she was charged an over the limit fee before she was informed. The compliance officer reviewed
the statement and determined that the customer was correct. If the bank determined that the credit limit should
be lowered, what should it have done? ANS Provide notice 45 days before the decrease to the credit limit
On Monday, ABC Bank received a written application from the Browns for a loan to purchase their home.
Later that day ABC mailed the Browns their early TILA disclosures. On what day may ABC debit the Browns
account for an application fee? ANS Friday
Which of the following statements is true regarding providing credit cards accounts to cardholders under the
age of 21? ANS The consumer must submit a written application
Sam owes a balance of $5,000 on his credit card account at Bank B. His minimum payment is $150 per month.
$1,000 of his balance is accruing interest at 3% (a promotional rate); the remaining balance is accruing interest
at 14%. Sam receives a bonus at work and submitted an additional payment of $500 on his account this month.
Which statement is true regarding the bank's responsibility for applying the extra payment? ANS The bank
should apply the extra payment to the balance accruing at the 14% rate
Which of the following is NOT a required disclosure on a loan secured by a dwelling? ANS Government
monitoring information
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