Federal Regulations and Compliance Standards Flashcards
7 cards from real CMC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Federal Regulations and Compliance Standards flashcards as text
Under the Fair Credit Reporting Act, a consumer has the right to dispute inaccurate information in their credit report. The credit bureau must investigate the dispute and respond within:
Answer: 30 days (or 45 days if additional information is received)
FCRA requires credit bureaus to investigate disputes within 30 days, extended to 45 days if the consumer submits additional relevant information.
A lender that offers better loan terms to a borrower in exchange for using the lender's affiliated title company, without proper disclosure, violates which law?
Answer: Real Estate Settlement Procedures Act
Tying better loan terms to the use of affiliated settlement services without proper AfBA disclosure violates RESPA's anti-kickback and affiliated business provisions.
The Home Ownership and Equity Protection Act (HOEPA) applies to high-cost mortgages. Which trigger makes a loan a HOEPA 'high-cost' loan?
Answer: APR exceeds the APOR by more than 6.5 percentage points for a first lien
A first-lien loan becomes a HOEPA high-cost mortgage when its APR exceeds the Average Prime Offer Rate (APOR) by more than 6.5 percentage points.
Which of the following actions by a loan officer would constitute 'steering' under Regulation Z?
Answer: Directing a creditworthy borrower to a subprime loan because it pays higher compensation
Steering occurs when an originator directs a borrower to a loan that is not in their interest primarily because it generates higher compensation for the originator.
Under the Military Lending Act (MLA), the Military Annual Percentage Rate (MAPR) charged to covered borrowers on consumer credit cannot exceed:
Answer: 36%
The Military Lending Act caps the MAPR at 36% for covered consumer credit products offered to active-duty servicemembers and their dependents.
A lender discovers that a protected class applicant was charged $500 more in fees than similarly situated non-protected-class applicants with no legitimate business reason. This is an example of:
Answer: Disparate treatment
Disparate treatment occurs when a lender intentionally treats applicants differently based on a protected class characteristic without a legitimate business justification.
Under TRID, the Closing Disclosure must be provided to the borrower at least how many business days before consummation?
Answer: 3 business days
TRID requires lenders to deliver the Closing Disclosure at least 3 business days before the loan closing date.