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CUCE - NCUA guidelines > Consumer Lending regs > Flashcards

Consumer Lending regs Flashcards

1
Q

What is the purpose of Reg Z?

A

Promote the informed use of consumer credit by requiring disclosures about terms and cost

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2
Q

How does credit union prevent liability for reg z violations?

A

Discover before consumer, take corrective action within 60 days of discovering error, notify borrower, and make adjustments to the account

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3
Q

What is subpart A of reg z

A

General

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4
Q

What is subpart b of reg z

A

Open end credit

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5
Q

What is subpart C of reg z

A

Closed end credit

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6
Q

What is subpart d of reg z

A

Miscellaneous

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7
Q

What is subpart g of reg z

A

Special rules applicable to credit card accounts and open end credit offered to college students

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8
Q

Where are model forms and clauses located in reg z

A

Appendix G and H

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9
Q

Does reg z subpart A apply to both open end and closed end credit?

A

Yes

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10
Q

Does reg z apply to credit extended primarily for business, commercial, or agricultural purposes?

A

No

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11
Q

Does reg z apply to extension of credit to a borrower other than a natural person?

A

No

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12
Q

What is the highest credit amount (for 2023) a consumer loan (not secured by real property or dwelling) can be before stops being covered by reg z

A

$66,400

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13
Q

Are private student loans covered by reg z?

A

Yes (but not government insured loan)

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14
Q

What is reg z definition of consummation

A

The time that a consumer borrower becomes contractually obligated on a credit transaction (varies state to state)

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15
Q

What is reg z definition of a dwelling

A

A residential structure that contains 1 to 4 units, whether or not that structure is attached to real property

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16
Q

What makes a loan open end credit

A

Creditor reasonably contemplates repeated transactions; creditor may impose a finance charge from time to time on an outstanding unpaid balance; and the amount of credit that may be extended to the consumer during the term of the plan (up to any limit set by the creditor) is generally made available to the extent that any outstanding balance is repaid

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17
Q

What is closed end credit

A

All credit other than open end

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18
Q

Does a title fee fall under finance charge

A

No

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19
Q

Finance charge includes charges that….

A

Are payable directly or indirectly by the consumer and are imposed directly or indirectly by the creditor incident to or as a condition of the extension of credit

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20
Q

Finance charge include fees and amounts that….

A

Are charged by someone other than the creditor if the creditor 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) requires a portion of the third party charge to the extent of the portion retained

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21
Q

What does finance charge directly exclude?

A

Application fees, late payment fee, over the limit fees, and participation fees

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22
Q

What three things are needed to exclude credit life, disability, debt cancellation insurance from finance charge

A

It’s not required to get the loan (and this is disclosed), the premium is disclosed, and member signs or initials to request coverage

23
Q

How is credit life, disability , debt cancellation insurance premium disclosed for open end loans?

A

Unit cost

23
Q

How is credit life, disability, debt cancellation insurance premium disclosed for closed end loans

A

Total cost

24
Q

How can property insurance be excluded from finance charge

A

If member can obtain from any provider acceptable to the credit union (and) if buying from credit union, the premium is disclosed

24
Q

Is interest considered a finance charge?

A

Yes

25
Q

What is definition of APR

A

The measure of the cost of credit, expressed as a yearly rate

26
Q

What is the tolerance for accuracy of APR?

A

1/8th of 1% above or below (same for open and closed end)

27
Q

What is tolerance of accuracy of finance charge for closed end credit

A

$5 for amt financed $1000 or less, and $10 for amt financed more than $1000

28
Q

What is needed for advertising?

A

Actually available terms, no misleading terms, and trigger terms require additional disclosures

29
Q

What are trigger terms for open end loans

A

Anything required by initial disclosures

30
Q

What are trigger terms for advertising closed end

A

Amount or percentage of any down payment, number of payments or repayment period, amount of any repayment, and amount of any finance charge

31
Q

Is APR a trigger term for closed end?

A

No, only trigger term for open end

32
Q

What are general requirements for open end disclosures

A

Account opening table, disclosures below the table, all charges imposed as part of plan, rates, (clear conspicuous, in writing, can keep)

33
Q

When is statement of billing rights required?

A

At account opening (and)

Annually as long form notice or summary notice on or with periodic statement every time

34
Q

What act created reg V

A

FACT Act

35
Q

What are the two options for notifying members when furnishing negative information to a CRA?

A

Notice to member before furnishing info to CRAs (or) notice to member within 30 days after furnishing info to CRAs

36
Q

When credit score is used in connection with mortgage application, what needs included in the notice to home loan applicant

A

Consumers credit score, range of possible scores, date score was created, key factors influencing score

37
Q

How long do criteria for prescreening need to be retained?

A

Three years

38
Q

Does risk based pricing notice apply to business

A

No

39
Q

Who is covered by military lending relief act

A

Active military members and dependants

40
Q

When is military lending relief act applicable

A

At point or origination

41
Q

What is cap for military lending relief act

A

36% MAPR cap

42
Q

Who is over mla

A

DoD

42
Q

Who is covered by SCRA

A

Active military members and dependants (indirectly)

42
Q

When is SCRA applicable

A

Existing debt

43
Q

Who is over scra

A

Cfpb

44
Q

How long does member have to notify about scra

A

180 after their release

45
Q

Are guarantors also protected by scra

A

Yes

46
Q

Generally no default judgment against active duty?

A

True

47
Q

When scra period ends and rate going back up, what does TILA require?

A

Sending a change in terms notice to member (45 days before)

48
Q

Can MLA be waived

A

No (scra can be waived by member)

49
Q

What is included when calculating MAPR cap

A

Cannot exceed: finance charges (under reg z), most application fees, premiums for credit insurance, fees for debt cancellation contracts, fees for “credit related ancillary products”

CUCE - NCUA guidelines (4 decks)

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