Consumer Lending Regs Truth In Lending Act Reg Z

Question 1

When was truth in lending act enacted?

Answer 1

1968

Question 2

What is the purpose of truth in lending act?

Answer 2

To promote the informed use of consumer credit by requiring disclosures about its terms and cost

Question 3

Who has the authority to supervise and enforce the compliance of the truth in lending act?

Answer 3

CFPB consumer financial protection bureau

Question 4

Penalty of $500-$5000+
Actual damages+
Costs of attorney fees
These are examples of possible _____ for violations of truth in lending act

Answer 4

Penalties… what you may be liable for

Question 5

True or false if you take corrective action with in 60 days of discovering an error, you notify the borrower and you make adjustments to the account there is no liability?

Answer 5

True
Must discover error before borrower though

Question 6

Sub part A- general
Sub part B-open end credit
Sub part C-closed end credit
Subpart D- miscellaneous
Subpart E- special rules for certain home mortgage transactions
Subpart F- special rules for private education loans
Subpart G- special rules applicable to credit card accounts and open end credit offered to college students
Appendix G and H- open end and closed end model forms and clauses
Supplement I- official staff commentary
These all make up what regulation?

Answer 6

Reg Z

Question 7

Subpart A general applies to both open end and closed end credit true or false?

Answer 7

True

Question 8

Credit extended primarily for a business, commercial or agricultural purpose
An extension of credit to a borrower other than a natural person
Credit over $66,400 for 202: that is not secured by real property or a dwelling
Government insured or guaranteed student loans
These are examples of what?

Answer 8

Things regulation Z does not apply to.

Question 9

The loan amount reg Z doesn’t apply changes every year true or false?

Answer 9

True

Question 10

True or false you can decide to have all your consumer credit covered by Reg Z?

Answer 10

True
Most entities decide to do it this way because it’s easier

Question 11

Match the word to the definition:
A day ok which the creditors offices are open to the public for carrying on all of its business functions:
Business day
Consummation
Dwelling
Open end credit
Closed end credit

Answer 11

Business day

Question 12

Match the word to the definition:
The time that a consumer becomes contractually obligated on a credit transaction:
Business day
Consummation
Dwelling
Open end credit
Closed end credit

Answer 12

Consummation

Question 13

Match the word to the definition:
A residential structure that contains 1 to 4 units whether or not the structure is attached to real property. Includes an individual condominium unit, cooperative unit mobile home or trailer if it is used as a residence.
Business day
Consummation
Dwelling

Answer 13

Dwelling

Question 14

Consumer credit extended by creditor under a plan on which
Creditor reasonably contemplates repeated transactions
Creditor may impose a finance charge from time to time on and outstanding balance and
The amount of credit that may be extended to the consumer during the term of the plan is generally made available to the extent that any outstanding balance is repaid
Is this open end credit or closed end credit

Answer 14

Open end credit

Question 15

What is an example of a kind of open end credit?

Answer 15

Credit card
Line of credit

Question 16

What is an example of a closed end credit?

Answer 16

Auto loan

Question 17

A measure of the cost of consumer credit as a dollar amount is a_____

Answer 17

Finance charge

Question 18

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
Fees and amounts charged by someone other than the creditor if the creditor requires the use of 3rd parties as a condition of credit, or retains a portion of the 3rd party charge to the extent of the portion retained
These are charges included in _____

Answer 18

Finance charges

Question 19

Examples of things that can be excluded from finance charges?

Answer 19

Application fee
Late payment fees
Over the limit fees
Participation fees

Question 20

You can exclude credit life, disability debt cancellation from finance charge if____

Answer 20

It is not required to get the loan and this fact is disclosed
Premium is disclosed (open end=unit cost, closed end= total cost)
Member signs or initials to request coverage

Question 21

Property insurance can be excluded from finance charge if_____

Answer 21

Borrower must obtain from any provider acceptable to credit Union
If buying from credit Union the premium is disclosed

Question 22

Interest
Service, transaction and activity charges
Borrowers points, including loan fees, assumption fees and finder fees
Credit report fees are included for most loans but are excluded for mortgage loans
These are all examples of ______

Answer 22

Finance charges

Question 23

The measure of the cost of credit measured as a yearly rate is called the______

Answer 23

Annual percentage rate

Question 24

The amount financed
The finance charge
The payment schedule
These all effect the

Answer 24

APR

Question 25

APR is considered accurate if it is disclosed at____

Answer 25

1/8th of 1% above or below the actual Apr This is called the tolerance

Question 26

For open end credit if relationships changes change in term notice must be sent how many days before the change comes into effect

Answer 26

45 days

Question 27

True or false the tolerance for finance charge on closed end loans is either 5 or 10 dollars depending on the amount financed

Answer 27

True 5 for 1000.00 or less 10 for amount financed of 1000 or more

Question 28

The key to closed end loans is___

Answer 28

That the amount to borrow is a set amount And has a set term It is a one time transaction

Question 29

An example of closed end credit is

Answer 29

Car loan

Question 30

Actually available terms No misleading terms Trigger terms require additional disclosures These are the general rules of _____

Answer 30

Advertising

Question 31

For open end credit what’s some examples of trigger terms for advertising

Answer 31

Finance charge Apr Fees

Question 32

Any minimum fixed, transaction activity or similar charge Any periodic rate that may be applied, expressed as an APR Any membership or participation fee If these are mentioned in advertising for open end credit you are required to do whay____

Answer 32

Provide additional disclosures

Question 33

Amount or percentage of any down payment Number of payments or repayment term Amount of any payment Amount of finance charge These are examples of ______ for closed end credit

Answer 33

Trigger terms

Question 34

True or false APR is a trigger term for open end credit but not for closed end credit

Answer 34

True

Question 35

Credit card application disclosures should be provided on or with the credit card application true or false?

Answer 35

True

Question 36

What ways can you provide credit card application disclosures?

Answer 36

Via direct mail- have to be accurate as of mailing date Available to general public- must state effective date and contact information In person- Telephone- either have to provide full disclosure orally or within 30 days so they get them before they could start accumulating fees on the card Electronic- like direct mail accurate as of date they were sent

Question 37

Clear and conspicuous In writing In a form the member can keep Account opening table Disclosures below the table All charges Rates These are the required components of____

Answer 37

Open end credit account opening disclosures

Question 38

When should we give a statement of billing rights to members? Open end credit

Answer 38

With the account opening disclosures and either In long form notice provided annually Or summary notice on or with every periodic statement Has to be sent at least annually

Question 39

Information specific to members account Provided with the account agreement These are requirements for the ______

Answer 39

Account opening disclosure

Question 40

Clear and conspicuous, in writing in a form member can keep Finance charge and annual percentage rate must be more conspicuous when used with a number… like bold Must be given before consummation Based on actual terms Can not contain unrelated information These are requirements for____

Answer 40

Closed end credit disclosures

Question 41

When should you provide a change in terms notice to members for open end credit?

Answer 41

When there is a significant change in terms or minimum payment is increased Apr change on non variable rate account increased fees Change to grace period Change to balance calculation method

Question 42

Who must you provide change in term notices to?

Answer 42

Each affected member

Question 43

Change in credit limit Suspension of future Credit privileges Skip a pay programs If properly disclosed at account opening These are examples of when a _____ is not required for open end credit

Answer 43

Change in term notice

Question 44

Previous balance Transactions Credit Periodic rates Balance on which finance charge was computed Charges imposed Change in terms Increased penalty rate Grace period Address for notice of billing errors Closing date of billing cycle New balance Due date Late payment costs This is information that has to be on_____

Answer 44

Open end credit periodic statement

Question 45

How should notice of billing error be done? Within how many days should the notice of billing error be received?

Answer 45

In writing Within 60 days of periodic statement that showed the error

Question 46

What should the member include in their notice of billing error?

Answer 46

Information that allows the credit Union to identify member and account Information on why the member thinks there was an error, the date, type of transaction and the amount

Question 47

What steps should the credit Union take in response to a notice of billing error?

Answer 47

Send written acknowledgment of notice to member within 30 days Resolve error within 2 billing cycles or 90 days Discontinue collection efforts for the amount being disputed

Question 48

Can the member withhold payment on disputed amount until the error is resolved?

Answer 48

Yes

Question 49

Can a credit Union send adverse reporting to credit reporting agency for the disputed amount?

Answer 49

No

Question 50

If a member tries to dispute the same transaction after you investigate and provide notice that no error occurred do you have to do anything?

Answer 50

You have no obligation to investigate again and notify again

Question 51

Correct Notify These are steps credit Union should take if investigations showed an error. True or false

Answer 51

True

Question 52

If no error occurred you notify member and provide documentation to show no error occurred and you notify member of amount due and give them additional time to pay… true or false

Answer 52

True

Question 53

If credit union receives payments in excess of minimum payment the payment must be applied to the highest Apr and then the next highest in descending order True or false

Answer 53

True

Question 54

How long should a credit Union retain records of compliance with reg z for

Answer 54

2 years after the date disclosures were required to be made

Question 55

If you discover an unintentional error on complying with Reg Z requirements what corrective action must you take?

Answer 55

Notify the affected members Make appropriate adjustments within 60 days of discovery of error And before any legal action has begun or member gives written notice of the error

Question 56

What are examples of charges that are considered components of a finance charge?

Answer 56

Interest Service fees, transaction fees, activity charges, carrying charges Appraisal fees, investigation fees, credit report fees Premiums or other charges for any guarantee or insurance thay protects your credit union against member defaults Charges your credit Union pays to another person for purchasing or accepting a loan

Question 57

The special rules for credit cards allow the member to withhold payment of up to the full amount of the transaction plus any finance charge imposed on that amount when there is a unresolved dispute between the member and a merchant. What three conditions must be met before this rule can apply?

Answer 57

The member has made attempt to resolve the dispute The amount involved is greater than $50 The transaction occurs in the members state or within 100 miles of the members current address