CFB Credential and Training Requirements 3 — Questions and Answers
Question 1: Under FMCSA rules, a freight broker who also operates as a carrier must ensure that their broker and carrier roles are clearly separated to avoid which prohibited practice?
- Double brokering
- Co-brokering
- Commingling of funds
- Self-dealing without disclosure (Correct answer)
Correct answer: Self-dealing without disclosure
A broker acting as both broker and carrier in the same transaction without disclosure to all parties constitutes impermissible self-dealing.
Question 2: If a freight broker's surety bond is cancelled, how many days' notice must the surety company provide to the FMCSA before cancellation is effective?
- 10 days
- 30 days (Correct answer)
- 45 days
- 60 days
Correct answer: 30 days
The surety must provide 30 days' written notice to FMCSA before a broker's bond cancellation takes effect.
Question 3: Which alternative financial instrument may a freight broker use in lieu of a surety bond to meet the $75,000 security requirement?
- A letter of credit from a bank
- A trust fund agreement (Correct answer)
- A performance escrow account
- A shipper indemnification agreement
Correct answer: A trust fund agreement
FMCSA regulations permit a trust fund agreement as an acceptable alternative to a surety bond for freight brokers.
Question 4: What happens to a freight broker's operating authority if the required surety bond or trust fund lapses?
- Authority is suspended until new security is filed (Correct answer)
- Authority is permanently revoked
- A 90-day grace period is automatically granted
- The broker may continue operating under a provisional status
Correct answer: Authority is suspended until new security is filed
FMCSA suspends the broker's operating authority immediately upon lapse of the required security instrument.
Question 5: The CTB exam administered by TIA covers which broad knowledge area related to broker credentials and legal compliance?
- Personal financial management
- Federal and state regulatory requirements (Correct answer)
- International maritime law
- Customs and border protection protocols
Correct answer: Federal and state regulatory requirements
The CTB exam includes a regulatory module covering federal statutes and FMCSA rules that govern freight broker operations.
Question 6: A newly licensed freight broker must register their business entity name with FMCSA. What term describes the operating name if it differs from the legal entity name?
- Trade name or DBA (doing business as) (Correct answer)
- Assumed authority designation
- Secondary carrier identification
- Proxy business entity
Correct answer: Trade name or DBA (doing business as)
A freight broker operating under a name different from their legal entity name must register it as a trade name or DBA with FMCSA.
Question 7: How frequently must a freight broker update their MCS-150 (Motor Carrier Identification Report) with the FMCSA?
- Annually
- Every two years (Correct answer)
- Every three years
- Only when information changes
Correct answer: Every two years
FMCSA requires freight brokers to update their MCS-150 every two years to maintain accurate registration records.
CFB Credential and Training Requirements 3
Under FMCSA rules, a freight broker who also operates as a carrier must ensure that their broker and carrier roles are clearly separated to avoid which prohibited practice?