CRCM Fair Lending and Equal Credit Opportunity 3

Question 1

A lender is required under ECOA to consider alimony and child support as income if the applicant chooses to disclose it. This protects primarily which group?

Accepted Answer

Divorced or separated women

Answer

The ECOA rule on alimony and child support primarily protects divorced or separated women who rely on these payments as income.

Question 2

What is a 'pre-application' fair lending risk in the mortgage context?

Accepted Answer

Discouraging applicants from applying based on protected characteristics

Answer

Pre-application risks include discouraging or deterring protected class members from applying, which occurs before a formal application is submitted.

Question 3

Under the Fair Housing Act, which of the following is NOT a protected class?

Accepted Answer

Income level

Answer

Income level is not a protected class under the Fair Housing Act; the protected classes are race, color, religion, national origin, sex, disability, and familial status.

Question 4

A bank's fair lending self-assessment program should include:

Accepted Answer

Statistical analysis of lending data to detect potential disparities by protected class

Answer

Effective fair lending self-assessment includes statistical analysis of lending decisions, pricing, and terms to identify potential disparities by protected class.

Question 5

The 'similarly situated' analysis in fair lending compares:

Accepted Answer

Applicants who are comparable in creditworthiness but differ by protected class

Answer

'Similarly situated' analysis compares applicants with comparable qualifications, loan features, and risk factors who differ only in protected class membership.

CRCM - Certified Regulatory Compliance Manager Practice Test

CRCM - Certified Regulatory Compliance Manager Practice Test

CRCM Fair Lending and Equal Credit Opportunity 3