FiCEP - Financial Counseling Certification Program Consumer Protection Laws Questions and Answers 1

Question 1

A client is upset because a third-party debt collector called their workplace, discussed the debt with a coworker, and used profane language. Which consumer protection law most directly addresses these specific actions?

Accepted Answer

Fair Debt Collection Practices Act (FDCPA)

Answer

The Fair Debt Collection Practices Act (FDCPA) explicitly prohibits debt collectors from using abusive, unfair, or deceptive practices. This includes contacting consumers at inconvenient times or places, such as their workplace if they know the employer disapproves, discussing the debt with third parties, and using obscene or profane language.

Question 2

A member applies for a mortgage and is denied. Under the Equal Credit Opportunity Act (ECOA), which of the following reasons for denial is illegal?

Accepted Answer

The applicant's income is primarily from a public assistance program.

Answer

The Equal Credit Opportunity Act (ECOA) prohibits credit discrimination on the basis of race, color, religion, national origin, sex, marital status, age, or because an applicant receives income from any public assistance program. The other options are legitimate, creditworthiness-related reasons for a lender to deny a loan.

Question 3

To help a client compare the costs of two different car loans, a financial counselor would advise them to look at the disclosure form provided by the lender. Which law mandates that lenders provide this standardized disclosure showing the Annual Percentage Rate (APR) and total finance charge?

Accepted Answer

Truth in Lending Act (TILA)

Answer

The Truth in Lending Act (TILA), implemented by Regulation Z, requires lenders to disclose credit terms in a standardized way so consumers can easily compare costs. Key disclosures include the Annual Percentage Rate (APR), the finance charge, the amount financed, and the total of payments.

Question 4

A client discovers an account on their credit report that they never opened. Under the Fair Credit Reporting Act (FCRA), what is the most appropriate first step for the client to take?

Accepted Answer

File a formal dispute with the credit reporting agency that issued the report.

Answer

The Fair Credit Reporting Act (FCRA) gives consumers the right to dispute inaccurate information on their credit reports. The first step is to file a dispute directly with the credit reporting agency, which is then required to investigate the claim, typically within 30 days.

Question 5

Which of the following entities was established by the Dodd-Frank Act to serve as the primary federal agency for administering and enforcing consumer financial protection laws?

Accepted Answer

Consumer Financial Protection Bureau (CFPB)

Answer

The Consumer Financial Protection Bureau (CFPB) was created in 2010 as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Its central mission is to make markets for consumer financial products and services work for Americans by making rules more effective, enforcing laws, and empowering consumers to take more control over their economic lives.

FiCEP - Financial Counseling Certification Program Practice Test

FiCEP - Financial Counseling Certification Program Practice Test

FiCEP - Financial Counseling Certification Program Consumer Protection Laws Questions and Answers 1