Capital One Assessment Test Standards and Regulations 4 — Questions and Answers
Question 1: Under the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009, a credit card issuer must provide how many days advance notice before increasing an interest rate?
- 15 days
- 30 days
- 45 days (Correct answer)
- 60 days
Correct answer: 45 days
The CARD Act requires card issuers to provide at least 45 days' advance notice before increasing interest rates or making other significant changes.
Question 2: Capital One's compliance with the Americans with Disabilities Act (ADA) as applied to its digital products and ATMs primarily requires:
- Offering all products at a discount to disabled customers
- Ensuring accessible design so individuals with disabilities can access financial services equally (Correct answer)
- Hiring a minimum percentage of disabled employees in customer-facing roles
- Providing braille statements only upon written request
Correct answer: Ensuring accessible design so individuals with disabilities can access financial services equally
The ADA requires financial institutions to provide equal access to services, including accessible ATMs, websites, and mobile apps for customers with disabilities.
Question 3: Which regulation requires mortgage lenders to provide borrowers with a Loan Estimate within 3 business days of receiving a loan application?
- RESPA / Regulation X
- TILA-RESPA Integrated Disclosure (TRID) / Regulation Z (Correct answer)
- Home Mortgage Disclosure Act (HMDA)
- Equal Credit Opportunity Act (ECOA)
Correct answer: TILA-RESPA Integrated Disclosure (TRID) / Regulation Z
TRID (the TILA-RESPA Integrated Disclosure rule) requires lenders to issue a Loan Estimate within 3 business days of receiving a complete loan application.
Question 4: The Home Mortgage Disclosure Act (HMDA) requires lenders to collect and report data on mortgage applications primarily to:
- Set maximum interest rates for home loans in high-cost areas
- Identify potential discriminatory lending patterns and assess whether institutions are serving community needs (Correct answer)
- Establish minimum down payment requirements for conventional mortgages
- Determine property tax assessments for federally backed loans
Correct answer: Identify potential discriminatory lending patterns and assess whether institutions are serving community needs
HMDA data is used by regulators and the public to identify discriminatory lending patterns and evaluate whether lenders are meeting community credit needs.
Question 5: Under the Electronic Fund Transfer Act (EFTA) and Regulation E, which transaction type is NOT covered?
- ATM withdrawals
- Debit card point-of-sale purchases
- Direct deposit payroll credits
- Wire transfers between bank accounts (Correct answer)
Correct answer: Wire transfers between bank accounts
Wire transfers are governed by Article 4A of the UCC and Regulation J, not Regulation E, which covers consumer electronic fund transfers.
Question 6: Capital One's model risk management practices are guided primarily by which regulatory guidance?
- SR 11-7 (Guidance on Model Risk Management) (Correct answer)
- OCC Bulletin 2013-29 (Third-Party Relationships)
- FFIEC Cybersecurity Assessment Tool
- Basel III Pillar 3 Disclosure Requirements
Correct answer: SR 11-7 (Guidance on Model Risk Management)
SR 11-7, issued jointly by the Federal Reserve and OCC, provides the primary guidance for model risk management at large financial institutions.
Question 7: The USA PATRIOT Act Section 314(b) allows financial institutions to:
- Share customer information with foreign law enforcement without a subpoena
- Voluntarily share information with other financial institutions to identify and report money laundering or terrorism financing (Correct answer)
- Access OFAC SDN data in real time through a federal portal
- Freeze accounts of suspected terrorists without court approval for 72 hours
Correct answer: Voluntarily share information with other financial institutions to identify and report money laundering or terrorism financing
Section 314(b) provides a safe harbor allowing financial institutions to voluntarily share information with each other to identify and combat money laundering and terrorist financing.
Capital One Assessment Test Standards and Regulations 4
Under the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009, a credit card issuer must provide how many days advance notice before increasing an interest rate?