Truth in Lending Act

Question 1

In a credit transaction a “Pick Up Payment” is:

Answer 1

 Part of the down payment that must be paid before the second regular payment,
thereby lowering the scheduled payments

Question 2

In Virginia the maximum interest rate on an installment sales contract is:

Answer 2

 Whatever is agreed upon by the parties to the contract

Question 3

Where there is a co-purchaser, an adverse action (credit denial) letter:

Answer 3

 Must be sent to both.

Question 4

The credit terms may be a part of the Buyer’s order, thereby eliminating the need for a Retail Installment Sales Contract. (T/F)

Answer 4

 False

Question 5

The price of a vehicle may be raised to cover the costs of financing in a credit
transaction. (T/F)

Answer 5

 False

Question 6

If the dealer charges a processing fee, the fee in a credit transaction:

Answer 6

 Does not affect the finance charge or APR if the same fee is also charged to a
cash customer

Question 7

Motor vehicle dealers who arrange financing that results in debt to consumers (Not
businesses.) of less than $50,000 come under the Truth In Lending Act (TILA) if they:

Answer 7

 Have a written agreement with the customer calling for more than four
installments.
 Impose a finance charge in order to extend credit.