FREE CCE Legal & Regulatory Compliance Questions and Answers

Question 1

Which U.S. law prohibits discrimination in credit transactions?

Accepted Answer

Equal Credit Opportunity Act (ECOA)

Answer

The Equal Credit Opportunity Act (ECOA) is a U.S. federal law that prohibits creditors from discriminating against applicants based on race, color, religion, national origin, sex, marital status, or age (provided the applicant has the capacity to contract). It also prohibits discrimination because all or part of an applicant's income derives from any public assistance program. The ECOA ensures fair and equal access to credit for all consumers.

Question 2

What is the purpose of the Bank Secrecy Act (BSA)?

Accepted Answer

To combat money laundering through reporting requirements

Answer

The Bank Secrecy Act (BSA) is a U.S. federal law that requires financial institutions to assist U.S. government agencies in detecting and preventing money laundering. It mandates that institutions keep records of cash purchases of negotiable instruments, file reports of cash transactions exceeding $10,000, and report suspicious activity that might signify money laundering, tax evasion, or other criminal activities. Its primary goal is to create a paper trail for large financial transactions to aid law enforcement.

Question 3

Which regulation mandates disclosure of credit terms to consumers?

Accepted Answer

Truth in Lending Act (TILA)

Answer

The Truth in Lending Act (TILA) is a U.S. federal law designed to promote the informed use of consumer credit by requiring disclosures about its terms and costs. It mandates that lenders provide clear and conspicuous information about key credit terms, such as the annual percentage rate (APR), finance charge, amount financed, and total payments. This enables consumers to compare credit offers more effectively and make educated borrowing decisions.

Question 4

What does the Fair Credit Reporting Act (FCRA) govern?

Accepted Answer

Collection and use of consumer credit data

Answer

The Fair Credit Reporting Act (FCRA) is a federal law specifically designed to protect consumers' privacy and ensure the accuracy of information collected by credit reporting agencies. It governs how consumer credit data is collected, used, and disseminated by these agencies. This act grants consumers rights regarding their credit reports and helps maintain fairness in credit-related decisions.

Question 5

Which agency enforces the Consumer Financial Protection Bureau (CFPB) regulations?

Accepted Answer

Consumer Financial Protection Bureau (CFPB)

Answer

The Consumer Financial Protection Bureau (CFPB) is a U.S. government agency established to protect consumers in the financial marketplace. As its name suggests, the CFPB is responsible for writing and enforcing regulations that govern financial products and services. Therefore, it is the primary agency that enforces its own regulations to ensure fair practices and protect consumers from abusive financial activities.

CCE - Certified Credit Executive Practice Test

CCE - Certified Credit Executive Practice Test

FREE CCE Legal & Regulatory Compliance Questions and Answers