FiCEP Consumer Protection Laws 5

Question 1

A consumer discovers a fraudulent account on their credit report. Under FCRA, within how many days must a credit bureau complete its investigation after receiving a dispute?

Accepted Answer

30 days

Answer

The FCRA generally requires credit bureaus to complete investigations of consumer disputes within 30 days (extended to 45 days if the consumer provides additional information).

Question 2

Which consumer protection law specifically addresses abusive practices in payday lending and requires lenders to assess a borrower's ability to repay?

Accepted Answer

CFPB Small Dollar Rule

Answer

The CFPB's Small Dollar Lending Rule (Payday Rule) requires certain lenders to determine that borrowers have the ability to repay before extending short-term high-cost loans.

Question 3

Under the Real Estate Settlement Procedures Act (RESPA), what practice is explicitly prohibited?

Accepted Answer

Paying kickbacks or referral fees between settlement service providers

Answer

RESPA Section 8 prohibits giving or receiving any fee, kickback, or thing of value in exchange for referrals of settlement services.

Question 4

The Military Lending Act (MLA) caps the Military Annual Percentage Rate (MAPR) on consumer credit extended to active-duty servicemembers at what level?

Accepted Answer

36%

Answer

The MLA caps the MAPR at 36% for most consumer credit products offered to active-duty servicemembers and their dependents.

Question 5

Which of the following best describes a 'holder in due course' issue addressed by the FTC Holder Rule?

Accepted Answer

A consumer cannot assert defenses against a third-party creditor who purchased the debt

Answer

The FTC Holder Rule requires consumer credit contracts to include a notice preserving consumers' right to assert claims against subsequent holders of the contract.

FiCEP - Financial Counseling Certification Program Practice Test

FiCEP - Financial Counseling Certification Program Practice Test

FiCEP Consumer Protection Laws 5