Capital One Assessment Test Standards and Regulations 5 — Questions and Answers
Question 1: Under the Servicemembers Civil Relief Act (SCRA), active-duty military personnel are entitled to an interest rate cap of what percentage on pre-service debts?
- 3% per annum
- 6% per annum (Correct answer)
- 9% per annum
- 12% per annum
Correct answer: 6% per annum
The SCRA caps interest rates at 6% per annum on debts incurred prior to active military service upon written request.
Question 2: Which principle from the Basel III capital framework requires banks like Capital One to hold a minimum Common Equity Tier 1 (CET1) capital ratio to absorb losses?
- Leverage ratio requirement
- Liquidity Coverage Ratio (LCR)
- Minimum CET1 capital ratio of 4.5% of risk-weighted assets (Correct answer)
- Net Stable Funding Ratio (NSFR)
Correct answer: Minimum CET1 capital ratio of 4.5% of risk-weighted assets
Basel III requires banks to maintain a minimum CET1 ratio of 4.5% of risk-weighted assets, plus additional buffers for systemically important institutions.
Question 3: The Telephone Consumer Protection Act (TCPA) restricts financial institutions' ability to contact customers by requiring:
- Written consent before any phone contact regarding account balances
- Prior express consent before placing autodialed or prerecorded calls to cell phones (Correct answer)
- A 30-day opt-out window before initiating any marketing calls
- Federal Do-Not-Call registration to be checked only for new customer acquisitions
Correct answer: Prior express consent before placing autodialed or prerecorded calls to cell phones
The TCPA requires prior express written consent before placing autodialed or prerecorded calls or texts to mobile phone numbers.
Question 4: Capital One's obligation under the Children's Online Privacy Protection Act (COPPA) primarily applies when:
- Offering student loan products to college students under 22
- Collecting personal information online from children under 13 (Correct answer)
- Marketing credit cards to high school students with parental co-signers
- Processing transactions for merchants selling age-restricted products
Correct answer: Collecting personal information online from children under 13
COPPA requires verifiable parental consent before collecting, using, or disclosing personal information from children under 13 through online services.
Question 5: Under the Military Lending Act (MLA), which product offered to active-duty servicemembers is subject to the Military Annual Percentage Rate (MAPR) cap of 36%?
- VA home loans only
- Consumer credit products including credit cards, personal loans, and payday loans (Correct answer)
- Business credit cards issued to military contractors
- Mortgage loans secured by the servicemember's primary residence
Correct answer: Consumer credit products including credit cards, personal loans, and payday loans
The MLA's 36% MAPR cap applies broadly to consumer credit extended to active-duty servicemembers, including credit cards and personal loans (with limited exceptions).
Question 6: Which regulatory requirement mandates that financial institutions establish a Customer Identification Program (CIP) to verify the identity of customers opening new accounts?
- Regulation CC (Expedited Funds Availability Act)
- USA PATRIOT Act Section 326 (Correct answer)
- Regulation DD (Truth in Savings Act)
- Fair Credit Reporting Act Section 605B
Correct answer: USA PATRIOT Act Section 326
Section 326 of the USA PATRIOT Act requires financial institutions to implement a CIP to verify customer identities and maintain records.
Question 7: When Capital One denies a credit application, which regulation requires it to provide the applicant with a specific reason for the adverse action within 30 days?
- Fair Credit Reporting Act (FCRA) alone
- Equal Credit Opportunity Act (ECOA) / Regulation B, and FCRA if a consumer report was used (Correct answer)
- Truth in Lending Act (TILA) / Regulation Z
- Fair and Accurate Credit Transactions Act (FACTA)
Correct answer: Equal Credit Opportunity Act (ECOA) / Regulation B, and FCRA if a consumer report was used
ECOA/Regulation B requires specific adverse action notices within 30 days, and FCRA adds additional disclosure requirements when a consumer report contributed to the denial.
Capital One Assessment Test Standards and Regulations 5
Under the Servicemembers Civil Relief Act (SCRA), active-duty military personnel are entitled to an interest rate cap of what percentage on pre-service debts?