CRCM Fair Lending and Equal Credit Opportunity 2

Question 1

What does the Community Reinvestment Act (CRA) require of depository institutions?

Accepted Answer

They must meet the credit needs of their entire community, including low- and moderate-income areas

Answer

The CRA requires banks to meet the credit needs of all areas in their assessment area, including LMI communities, consistent with safe and sound operations.

Question 2

Which agency primarily enforces fair lending laws for national banks?

Accepted Answer

Office of the Comptroller of the Currency (OCC)

Answer

The OCC is the primary federal regulator for national banks and enforces fair lending laws including ECOA and the Fair Housing Act.

Question 3

'Steering' in fair lending means:

Accepted Answer

Directing qualified minority borrowers to higher-cost loan products

Answer

Steering involves directing creditworthy borrowers who qualify for prime products into higher-cost or subprime products based on protected characteristics.

Question 4

Under HMDA (Home Mortgage Disclosure Act), financial institutions must collect and report data to:

Accepted Answer

Identify possible discriminatory lending patterns and community credit needs

Answer

HMDA data is used by regulators and the public to identify discriminatory lending patterns and assess whether institutions are meeting community credit needs.

Question 5

Which of the following is an example of 'disparate treatment' in lending?

Accepted Answer

Charging minority applicants higher rates than similarly qualified non-minority applicants

Answer

Disparate treatment involves treating similarly situated applicants differently based on a protected characteristic, such as charging higher rates to minorities.

CRCM - Certified Regulatory Compliance Manager Practice Test

CRCM - Certified Regulatory Compliance Manager Practice Test

CRCM Fair Lending and Equal Credit Opportunity 2