Practice Test Geeks(CFE) Certified Financial Examiner Practice Test
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CFE Consumer Protection & Lending Compliance Flashcards

6 cards from real CFE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 6 CFE Consumer Protection & Lending Compliance flashcards as text

  1. What is the maximum civil penalty per violation under the Truth in Lending Act (TILA) for a class action lawsuit?

    Answer: $500,000 or 1% of the creditor's net worth

    Under TILA, class action damages are limited to the lesser of $500,000 or 1% of the creditor's net worth, in addition to actual damages and attorney's fees.

  2. Which act prohibits debt collectors from using abusive, unfair, or deceptive practices when collecting consumer debts?

    Answer: Fair Debt Collection Practices Act (FDCPA)

    The FDCPA restricts third-party debt collectors from using harassment, false statements, or unfair practices when attempting to collect consumer debts.

  3. Under the Servicemembers Civil Relief Act (SCRA), active-duty military members are entitled to which mortgage benefit?

    Answer: Interest rate cap of 6% on pre-service mortgage loans

    The SCRA limits mortgage interest rates to 6% per year for active-duty servicemembers on loans originated before military service began.

  4. A lender requires a borrower to purchase unnecessary add-on products (like credit insurance) as a condition of loan approval. This is known as:

    Answer: Tying or packing (predatory lending)

    Tying or packing forces borrowers to purchase unwanted products as a condition of credit, which is considered a predatory lending practice prohibited under consumer protection laws.

  5. What does the 'disparate impact' theory in fair lending examine?

    Answer: Whether a facially neutral policy produces discriminatory outcomes for protected classes

    Disparate impact theory holds that a lending policy can be discriminatory even without discriminatory intent if it disproportionately harms members of a protected class.

  6. Which disclosure must lenders provide within three business days of receiving a completed home purchase loan application under TRID rules?

    Answer: Loan Estimate

    Under the TILA-RESPA Integrated Disclosure (TRID) rule, lenders must provide the Loan Estimate within three business days of receiving a completed mortgage application.