Consumer Protection Regulations Flashcards

Under the Truth in Lending Act (TILA), the Annual Percentage Rate (APR) must be disclosed to allow consumers to:

Answer: Compare the true cost of credit across different lenders

The APR standardizes the cost of credit as an annualized rate, allowing consumers to meaningfully compare loan offers from different lenders.

Regulation Z implements which federal consumer protection law?

Answer: Truth in Lending Act

Regulation Z is the Federal Reserve's (and now CFPB's) implementing regulation for the Truth in Lending Act.

Under the Real Estate Settlement Procedures Act (RESPA), a kickback paid for the referral of settlement service business is:

Answer: Prohibited

RESPA Section 8 prohibits kickbacks and unearned fees in connection with federally related mortgage transactions.

The Servicemembers Civil Relief Act (SCRA) provides which protection to active duty military members?

Answer: Caps interest rates on pre-service debts at 6% during active duty

The SCRA caps interest rates at 6% on debts incurred prior to active duty service for qualifying servicemembers.

Under the Electronic Fund Transfer Act (EFTA), consumers have how many business days to report an unauthorized electronic fund transfer to limit liability to $50?

Answer: 2 business days

Consumers must report unauthorized EFTs within 2 business days of learning of the loss to limit liability to $50.

The Military Lending Act (MLA) caps the Military Annual Percentage Rate (MAPR) for most consumer credit products at:

Answer: 36%

The MLA imposes a 36% MAPR cap on most consumer credit extended to covered servicemembers and their dependents.