Regulatory & Compliance Standards Flashcards

Under Regulation B, how long does a creditor generally have to notify a consumer applicant of action taken after receiving a completed application?

Answer: 30 days

Regulation B requires notice of approval, counteroffer, or adverse action within 30 days of receiving a completed application.

Which of the following is NOT a prohibited basis for credit discrimination under the Equal Credit Opportunity Act?

Answer: Credit history

Credit history is a legitimate underwriting factor, while marital status, public assistance income, and age are prohibited bases.

A borrower qualifies for a loan on her own income, but the lender requires her husband to co-sign. Under Regulation B, this is generally:

Answer: Prohibited because the spouse's signature cannot be required when the applicant qualifies individually

Reg B's spousal signature rule bars requiring a spouse's signature when the applicant qualifies on their own creditworthiness.

Under the Fair Credit Reporting Act, most negative information other than bankruptcies may generally be reported for how long?

Answer: 7 years

Most adverse items drop off after 7 years, while Chapter 7 bankruptcies can be reported for 10 years.

A lender pulls a consumer credit report on a business owner's spouse who is not an applicant, guarantor, or owner. Under FCRA, this most likely lacks:

Answer: A permissible purpose

FCRA allows credit reports to be obtained only for a permissible purpose, such as a credit transaction involving that consumer.

How long must a creditor generally retain records related to a consumer credit application under Regulation B?

Answer: 25 months

Reg B requires retaining consumer credit application records for 25 months after notifying the applicant of the action taken.

For a business credit applicant with gross revenues of $1 million or less in its preceding fiscal year, Regulation B adverse action notification rules are:

Answer: Generally the same as for consumer applicants, with some flexibility in how the reasons are given

Small businesses with revenues of $1 million or less receive notices similar to consumers, though creditors have some flexibility in how they provide the reasons.