Industry Best Practices Flashcards

Under the FDCPA, collection calls are generally presumed inconvenient during which hours?

Answer: Before 8 a.m. and after 9 p.m. local time for the consumer

Communications before 8 a.m. or after 9 p.m. in the consumer's time zone are presumed inconvenient.

Regulation F sets a call-frequency presumption for debt collectors. What is it?

Answer: More than 7 calls in 7 days about a debt

Reg F presumes harassment if a collector calls more than seven times within seven days about a particular debt.

What is the best way to handle borrower complaints at a consumer finance company?

Answer: Log, track, investigate and analyze them for root causes

A strong complaint management system records every complaint and uses trends to fix underlying problems.

Which practice could be seen as a UDAAP violation in auto finance?

Answer: Selling add-on products such as GAP without the borrower's knowledge or consent

Packing add-ons into contracts without informed consent is a common deceptive or unfair practice cited by regulators.

What disclosure does the Truth in Lending Act require in a retail installment contract?

Answer: APR, finance charge, amount financed and total of payments

TILA's Regulation Z requires the key cost terms, including the APR and finance charge, to be clearly disclosed.

Before funding a loan, why should a lender screen applicants against the OFAC SDN list?

Answer: To avoid doing business with sanctioned persons or entities

U.S. persons may not do business with individuals or entities on OFAC's Specially Designated Nationals list.

What is a best practice for overseeing third-party vendors such as collection agencies or repossession companies?

Answer: Do due diligence, sign clear contracts and monitor performance and compliance regularly

Regulators hold lenders responsible for their service providers, so ongoing vendor management is expected.