Capital One Assessment Test Standards and Regulations 3 — Questions and Answers
Question 1: The Truth in Lending Act (TILA), implemented as Regulation Z, requires creditors to disclose which key metric to enable consumers to compare loan costs?
- Prime rate
- Annual Percentage Rate (APR) (Correct answer)
- Monthly payment amount
- Total loan origination fees
Correct answer: Annual Percentage Rate (APR)
TILA requires creditors to disclose the Annual Percentage Rate (APR), which reflects the true cost of credit including fees and interest.
Question 2: Under the Fair Credit Reporting Act (FCRA), how long can a Chapter 7 bankruptcy remain on a consumer's credit report?
- 5 years
- 7 years
- 10 years (Correct answer)
- 15 years
Correct answer: 10 years
Chapter 7 bankruptcy can remain on a credit report for up to 10 years from the filing date under the FCRA.
Question 3: What is the primary purpose of the Office of Foreign Assets Control (OFAC) sanctions programs relevant to banks?
- To prevent money laundering through real estate transactions
- To prohibit transactions with designated countries, entities, and individuals (Correct answer)
- To regulate cross-border wire transfer reporting
- To establish minimum capital requirements for international banks
Correct answer: To prohibit transactions with designated countries, entities, and individuals
OFAC administers sanctions programs that prohibit U.S. persons and institutions from conducting transactions with designated foreign countries, entities, and individuals.
Question 4: Which standard framework do U.S. banks use to guide their Anti-Money Laundering (AML) programs, requiring Customer Identification Programs and ongoing monitoring?
- Basel III Accords
- Bank Secrecy Act / USA PATRIOT Act framework (Correct answer)
- Dodd-Frank Act Title II
- Sarbanes-Oxley Act Section 404
Correct answer: Bank Secrecy Act / USA PATRIOT Act framework
The BSA, enhanced by the USA PATRIOT Act, provides the core framework for AML programs including CIP, suspicious activity monitoring, and reporting.
Question 5: Under the Fair Debt Collection Practices Act (FDCPA), which of the following is a prohibited debt collection practice?
- Sending written validation notices within 5 days of initial contact
- Calling a debtor at their workplace if the collector knows the employer prohibits such calls (Correct answer)
- Reporting delinquent accounts to credit bureaus
- Contacting a debtor between 8 AM and 9 PM local time
Correct answer: Calling a debtor at their workplace if the collector knows the employer prohibits such calls
The FDCPA prohibits collectors from contacting a debtor at work if the collector knows the employer prohibits such contact.
Question 6: The Dodd-Frank Wall Street Reform and Consumer Protection Act's Volcker Rule primarily restricts banks from:
- Offering adjustable-rate mortgages without qualified mortgage status
- Engaging in proprietary trading and owning hedge funds or private equity funds (Correct answer)
- Charging overdraft fees without explicit customer opt-in
- Using arbitration clauses in consumer financial contracts
Correct answer: Engaging in proprietary trading and owning hedge funds or private equity funds
The Volcker Rule prohibits banks from engaging in short-term proprietary trading of securities and from owning or investing in hedge funds and private equity funds.
Question 7: When a financial institution identifies a potentially suspicious transaction, it must file a Suspicious Activity Report (SAR) within how many calendar days of detection?
- 15 days
- 30 days (Correct answer)
- 45 days
- 60 days
Correct answer: 30 days
Financial institutions must file a SAR within 30 calendar days of detecting a suspicious transaction (extendable to 60 days if no suspect is identified).
Capital One Assessment Test Standards and Regulations 3
The Truth in Lending Act (TILA), implemented as Regulation Z, requires creditors to disclose which key metric to enable consumers to compare loan costs?