CCM Credit Law and Regulations 2

Question 1

Under the Equal Credit Opportunity Act (ECOA), which of the following is a prohibited basis for denying business credit?

Accepted Answer

Race or national origin

Answer

ECOA prohibits credit discrimination based on race, color, religion, national origin, sex, marital status, age, or because someone receives public assistance.

Question 2

The Robinson-Patman Act primarily concerns which aspect of credit and business transactions?

Accepted Answer

Price discrimination between competing purchasers

Answer

The Robinson-Patman Act prohibits sellers from charging different prices to competing buyers for goods of like grade and quality when the effect may substantially lessen competition.

Question 3

Which section of the Uniform Commercial Code (UCC) governs the sale of goods and is most relevant to trade credit transactions?

Accepted Answer

Article 2

Answer

UCC Article 2 governs contracts for the sale of goods, making it directly applicable to trade credit transactions between businesses.

Question 4

A creditor receives a notice that a debtor has filed for Chapter 11 bankruptcy. Which immediate legal obligation arises?

Accepted Answer

Cease all collection activity under the automatic stay

Answer

The automatic stay under 11 U.S.C. § 362 immediately prohibits creditors from continuing collection efforts upon a bankruptcy filing.

Question 5

Under UCC Article 9, a 'purchase money security interest' (PMSI) in inventory gives the secured creditor what special advantage?

Accepted Answer

Superpriority over prior perfected security interests if proper notice is given

Answer

A PMSI in inventory can achieve superpriority over earlier perfected security interests if the PMSI holder notifies prior secured parties and perfects before delivery.

(CCM) Certified Credit Manager Practice Test

(CCM) Certified Credit Manager Practice Test

CCM Credit Law and Regulations 2