Professional Standards and Ethics Flashcards
7 cards from real CAC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Professional Standards and Ethics flashcards as text
What is the main role of the Consumer Financial Protection Bureau (CFPB)?
Answer: Enforcing federal consumer financial laws and supervising certain financial companies
The CFPB enforces federal consumer financial protection laws such as TILA, ECOA, and FDCPA, and supervises many lenders and servicers.
Which statement describes 'fiduciary-like' professional conduct toward customers in consumer finance?
Answer: Acting honestly, fairly, and in good faith, without exploiting customer vulnerabilities
Even without a formal fiduciary duty, professional standards require honesty, fair dealing, and good faith.
A customer disputes information you reported to a credit bureau. Under the FCRA, what must the furnisher do after receiving notice of the dispute?
Answer: Conduct a reasonable investigation and correct any inaccurate information
Furnishers must reasonably investigate disputes and correct or update inaccurate information they reported.
Why is documenting the reason for an exception or override important?
Answer: It creates an audit trail showing consistent, non-discriminatory decisions
Documented reasons show that exceptions were based on legitimate business factors and help defend against fair-lending claims.
Which is an example of a deceptive advertising practice?
Answer: Promoting 'guaranteed approval' when approval actually depends on credit review
Claims that mislead consumers about material terms, such as false approval guarantees, are deceptive under UDAAP and FTC rules.
What is the best way for a professional to keep their ethical and regulatory knowledge current?
Answer: Complete ongoing compliance training and review policy and regulatory updates
Regulations and policies change, so ongoing training is essential to professional competence.
A whistleblower reports suspected fraud in good faith. What should the organization do?
Answer: Protect them from retaliation and investigate the report
Ethical organizations, and laws such as Dodd-Frank, protect good-faith reporters from retaliation and require reports to be investigated.