Consumer Lending Regs- Prework Flashcards
What is an example of a type of loan that’s not considered a consumer loan?
Loan secured by real estate
What are some examples of consumer loans?
Car loan
Personal/signature loan
Line of credit
Credit card
Share secured loans
Student loans
What is the process of consumer lending?
Advertising
Membership
Credit application
Underwriting
Decision and communication
Disclosures
Agreement
Servicing
And collections
What are these acronyms?
TILA
FCRA
UDAAP
CFPB
MLA
SCRA
FDCPA
FRB
NCUA
CUNA
ECOA
UCC
CFR
Truth in lending act
Fair credit reporting act
Unfair, deceptive or abusive acts or practices
Consumer financial protection bureau
Military lending act
Service members civil relief act
Fair debt collections practices act
Federal reserve board
National credit Union association
Credit Union national association
Equal Credit opportunity act
Uniform commercial code
Code of federal regulations
Both houses of congress pass a identical bill
President signs into law
Law is assigned to regulatory agency
Proposed rule
Final rule
This is the process of what?
A regulation
What is the regulation for truth in lending act?
Regulation Z
What does the Equal credit opportunity act prohibit?
Discrimination on prohibited bases
What are examples of discrimination based on prohibited bases?
Discrimination based on these factors
Race
Sex
Color
Religion
National origin
Marital status
Age
Public assistance
What does the fair credit reporting act has to do with?
Anytime you use credit information
Anytime you furnish information to consumer reporting agencies
Requires disclosures be given and you need to be accurate
What is the regulation for equal credit opportunity act?
Regulation B
What is the regulation for fair credit reporting act?
Regulation v
Military lending act deals with what type of debt?
New debt
Who qualifies for military lending act?
Active duty military and their dependents
What type of debt does servicemember civil relief act deal with?
Existing debt
Who qualifies for the coverage of service member civil relief act?
Active duty military and their dependents
What percent is the interest rate cap for service member relief act?
6%
Does each state create their own version of UCC?
Yes each state has to adopt their own form of the commercial code
UCC article 9 deals with what type of transactions?
Secured transactions
What was UCC intended to do?
Create uniform laws across states to make commerce as possible
What are some examples of lending transactions not covered by UCC article 9?
Real estate
Article 9 deals with how you get a lien on secured goods, true or false?
True
Figure out who has possession of the goods
Consumer goods there is attachment
Title process lien needs to be on the title
Financing statement or UCC 1 for items not titled by the DMV
These things are the process for what?
Perfecting a lien/perfecting a security interest
True or false it is not a secured loan if we don’t have a secured lien?
True
UCC requires we dispose of collateral in a commercially reasonable fashion true or false?
True
When repossessing a vehicle we should give person an opportunity to redeem it true or false?
True
If we sell the collateral we have to give notice? True or false
True
If we sell the collateral we have to apply proceeds in accordance with UCC true or false?
True
A loan, line of credit, or letter of credit used for commercial, industrial, agricultural or professional purposes are what type of loan?
Commercial loans
True or false: all loans made to a business are commercial loans?
False
What is the threshold amount for loan to be considered commercial loan?
$50,000
Do aggregate loans together to determine if a loan is a commercial loan based on the $50,000.00 threshold?
Yes
Loans fully secured by 1-4 family residential property
Loans fully secured by shares
Loans secured by a vehicle manufactured for household use
These are examples of what?
Exceptions to the 50k threshold commercial loan
They would not be considered a commercial loan if they are over the 50k threshold
Types of commercial loans you’re going to make
Maximum amount of assets allowed in commercial loans
Aggregate amount of commercial loans to any one borrower or group of associated borrowers
These are examples of some of the things that should be included in your what?
Commercial loan policy
True or false: the board doesn’t have to review and approve the commercial loan policy annually?
False the board has to review the policy annually and has to approve it
What is the % of the credit unions net worth that commercial loans to one borrower can not exceed?
15%
True or false aggregate amount of commercial loans to one borrower can be $100,000 + 10% of the credit unions net worth as long as the amount exceeding 15% is fully secured at all times?
True
Senior management directly involved in commercial loan underwriting, servicing, and collections and any of their immediate family members, any associated borrowers
Compensated directors and their immediate family
These are examples of what?
Prohibited commercial loan borrowers
True or false you may grant a commercial loan to a compensated director as long as they remove themselves from the discussion and the board approves?
True
Written loan policies
No prepayment penalties
Maximum interest rate =18%
Limit on loans and lines of credit to one borrower 10% of credit unions unimpaired shares and surplus
Limit on loans and lines of credit to credit Union officials 20k+ pledged shares
These are what?
General requirements for consumer lending
Loan amount $200-$1000
Interest rate maximum: 28%
Term 1-6 months
Membership length: minimum of 1 month
Application fee: up to 20 bucks
Must be fully amortized and underwritten
No rollovers
This is information for what type of loan?
Payday alternative loans (PALS)
Generally what is the maximum loan term for consumer loans?
15 years
No maturity date: lines of credit
20 years certain mobile home, RV, home improvement loan second mortgage loan
40 years residential real estate loans secured by 1-4 family property that is or will be the borrowers principle residence
These are examples of what?
Exceptions to the loan maturity term
Adopt written policy
Set cap on amount of all these
Establish a time limit to repay
Limit amount allowed per member
Establish fee and interest rate
This is all information that your credit union should disclose about what?
Overdrafts
What’s the maximum amount of days a member should have to repay an overdraft
45 days
True or false overdrafts are loans?
False
What is a participation loan?
When a credit Union purchases loans from
Other credit unions
Cusos
Federally insured financial institutions
State or federal government agencies
True or false the purchasing credit Union must have a written loan participation policy?
True
Underwriting standards
Limit on aggregate amount that may be purchased from anyone originating lender
Limit on amount by each loan type
Limit on aggregate amount with respect to anyone borrower or group of associated borrowers
This is information that should be covered in your credit unions _____ policy
Participation loan policy
What is the maximum aggregated amount that may be purchased from any one originating lender?
$5,000,000 or 100% of credit unions net worth
What is a statutory lien?
Lien on members share and dividends to satisfy outstanding obligations
