CRB Banking Products & Customer Service 3 — Questions and Answers
Question 1: A customer age 68 asks about a product that lets them convert home equity into cash without monthly mortgage payments. What product applies?
- Home Equity Loan
- Reverse Mortgage (Correct answer)
- Cash-Out Refinance
- HELOC
Correct answer: Reverse Mortgage
A reverse mortgage allows eligible homeowners 62+ to convert home equity to cash with no required monthly mortgage payments.
Question 2: Which type of checking account is specifically designed for customers who cannot qualify for a standard account due to prior banking history?
- NOW Account
- Second Chance Checking Account (Correct answer)
- Money Market Checking
- Interest Checking Account
Correct answer: Second Chance Checking Account
Second chance checking accounts serve customers with negative ChexSystems histories, providing a pathway back to mainstream banking.
Question 3: Under the Truth in Savings Act (TISA), banks must disclose the Annual Percentage Yield (APY) rather than just the interest rate because:
- APY excludes compounding effects to simplify comparisons
- APY reflects the effect of compounding and allows accurate comparison between products (Correct answer)
- APY is always higher than the nominal rate making it more attractive
- APY is required only for business accounts
Correct answer: APY reflects the effect of compounding and allows accurate comparison between products
APY incorporates the compounding frequency, giving consumers a standardized measure to compare savings products across institutions.
Question 4: A customer holds a joint checking account with right of survivorship. Upon one account holder's death, the funds:
- Are frozen until probate is completed
- Pass directly to the surviving account holder (Correct answer)
- Are transferred to the deceased's estate
- Require a court order to access
Correct answer: Pass directly to the surviving account holder
Right of survivorship means funds transfer automatically to the surviving joint owner, bypassing probate.
Question 5: Which consumer protection law requires lenders to provide a Loan Estimate within three business days of receiving a mortgage application?
- Equal Credit Opportunity Act (ECOA)
- Community Reinvestment Act (CRA)
- TILA-RESPA Integrated Disclosure (TRID) Rule (Correct answer)
- Gramm-Leach-Bliley Act (GLBA)
Correct answer: TILA-RESPA Integrated Disclosure (TRID) Rule
TRID (also known as the Know Before You Owe rule) mandates delivery of the Loan Estimate within three business days of application.
Question 6: A customer asks about a card that builds credit history without requiring a deposit. Which product is this?
- Secured Credit Card
- Prepaid Debit Card
- Unsecured Credit Card (Correct answer)
- Stored Value Card
Correct answer: Unsecured Credit Card
Unsecured credit cards extend credit based on creditworthiness without requiring a security deposit, unlike secured cards.
Question 7: What is the primary purpose of a Flexible Spending Account (FSA) offered through banking/employer benefits?
- To invest in mutual funds with pre-tax dollars
- To pay eligible medical or dependent care expenses with pre-tax dollars (Correct answer)
- To save for retirement with employer matching
- To earn interest on emergency savings tax-free
Correct answer: To pay eligible medical or dependent care expenses with pre-tax dollars
FSAs allow employees to set aside pre-tax dollars specifically for eligible healthcare or dependent care expenses, reducing taxable income.
CRB Banking Products & Customer Service 3
A customer age 68 asks about a product that lets them convert home equity into cash without monthly mortgage payments.
What product applies?