FiCEP Consumer Protection Laws 4 — Questions and Answers
Question 1: Under the Electronic Fund Transfer Act (EFTA), what is the maximum consumer liability for unauthorized transactions if the consumer reports the loss of an ATM card within 2 business days?
- $0
- $50 (Correct answer)
- $500
- $5,000
Correct answer: $50
The EFTA limits consumer liability to $50 if the loss or theft of an ATM/debit card is reported within 2 business days.
Question 2: Which federal law prohibits debt collectors from contacting a consumer at work if the collector knows the employer disapproves?
- Truth in Lending Act
- Fair Credit Reporting Act
- Fair Debt Collection Practices Act (Correct answer)
- Equal Credit Opportunity Act
Correct answer: Fair Debt Collection Practices Act
The FDCPA specifically prohibits debt collectors from contacting consumers at their place of employment if the collector knows the employer prohibits such contact.
Question 3: The Gramm-Leach-Bliley Act (GLBA) requires financial institutions to do which of the following?
- Offer free credit monitoring to all customers
- Provide privacy notices explaining information-sharing practices (Correct answer)
- Freeze consumer credit upon request at no charge
- Report all customer transactions to federal regulators
Correct answer: Provide privacy notices explaining information-sharing practices
GLBA requires financial institutions to give customers privacy notices describing how personal financial information is collected and shared.
Question 4: Which agency enforces consumer financial protection laws for most nonbank financial companies under the Dodd-Frank Act?
- Federal Trade Commission (FTC)
- Consumer Financial Protection Bureau (CFPB) (Correct answer)
- Office of the Comptroller of the Currency (OCC)
- Federal Deposit Insurance Corporation (FDIC)
Correct answer: Consumer Financial Protection Bureau (CFPB)
The CFPB was created by the Dodd-Frank Act and has primary supervisory and enforcement authority over nonbank financial companies offering consumer financial products.
Question 5: Under the Telephone Consumer Protection Act (TCPA), what must businesses obtain before sending marketing text messages to consumers?
- Written consent from the consumer (Correct answer)
- Approval from the FCC on a per-campaign basis
- A verified physical mailing address for the consumer
- Registration with the National Do Not Call Registry
Correct answer: Written consent from the consumer
The TCPA requires prior express written consent before sending automated marketing texts or calls to consumers.
Question 6: What is the primary purpose of the Magnuson-Moss Warranty Act?
- Regulate mortgage disclosures
- Set minimum warranty terms for consumer products
- Require written warranties to be available before purchase (Correct answer)
- Limit interest rates on consumer credit
Correct answer: Require written warranties to be available before purchase
The Magnuson-Moss Warranty Act requires that written warranties on consumer products be available to consumers before purchase so they can make informed decisions.
Question 7: Under the Fair Housing Act, which action by a lender would constitute illegal steering?
- Denying a loan due to insufficient income
- Directing minority applicants only toward high-cost loan products (Correct answer)
- Requiring a minimum down payment from all borrowers
- Charging market-rate interest to all applicants regardless of credit score
Correct answer: Directing minority applicants only toward high-cost loan products
Steering occurs when lenders direct borrowers from protected classes toward less favorable loan products, which is prohibited under the Fair Housing Act.
FiCEP Consumer Protection Laws 4
Under the Electronic Fund Transfer Act (EFTA), what is the maximum consumer liability for unauthorized transactions if the consumer reports the loss of an ATM card within 2 business days?