What was the first act passed in regard to Fair Lending?

Home Ownership and Equity Protection Act

Which of the following acts is NOT directly related to fair lending?

Home Ownership and Equity Protection Act

Who has the enforcement duties for the Fair Lending laws and regulations such as ECOA and HMDA?

Consumer Financial Protection Bureau

Department of Housing and Urban Development

Fair Lending Final Quiz

1.

What was the first act passed in regard to Fair Lending?
- A.
  
  Fair Housing Act
- B.
  
  Equal Credit Opportunity Act
- C.
  
  Home Mortgage Disclosure Act
- D.
  
  Home Ownership and Equity Protection Act
Correct Answer
A. Fair Housing Act

Explanation
The Fair Housing Act was the first act passed in regard to Fair Lending. This act was enacted in 1968 and prohibits discrimination in the sale, rental, and financing of housing based on race, color, religion, sex, national origin, familial status, and disability. It aims to ensure equal access to housing opportunities for all individuals and promotes fair lending practices in the housing market.

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2.

Which act established the CFPB?
- A.
  
  ECOA
- B.
  
  Fair Housing Act
- C.
  
  Dodd-Frank Act
- D.
  
  SAFE Act
Correct Answer
C. Dodd-Frank Act

Explanation
The Dodd-Frank Act established the CFPB (Consumer Financial Protection Bureau). This act was passed in response to the 2008 financial crisis and aimed to regulate the financial industry and protect consumers from abusive practices. The CFPB was created as an independent agency within the Federal Reserve System and is responsible for enforcing consumer protection laws, promoting financial education, and ensuring fair and transparent markets for consumer financial products and services.

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3.

Which of the following acts is NOT directly related to fair lending?
- A.
  
  Fair Housing Act
- B.
  
  Equal Credit Opportunity Act
- C.
  
  Homeowners Protection Act
- D.
  
  Home Ownership and Equity Protection Act
Correct Answer
C. Homeowners Protection Act

Explanation
The Homeowners Protection Act is not directly related to fair lending. It is a federal law that provides certain rights to homeowners with regards to private mortgage insurance (PMI). The act requires lenders to automatically terminate PMI once the homeowner has reached a certain amount of equity in their home. While this act provides protection to homeowners, it does not specifically address fair lending practices or discrimination in lending.

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4.

Fair Lending is defined as, “fair, equitable, and nondiscriminatory access to credit for consumers.”
- A.
  
  True
- B.
  
  False
Correct Answer
A. True

Explanation
The statement is true because fair lending refers to providing equal and unbiased access to credit for all consumers, without any discrimination. It ensures that individuals are not denied credit or charged higher interest rates based on factors such as race, gender, religion, or national origin. Fair lending promotes equal opportunities and prevents unfair practices in the lending industry.

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5.

Penalties for each violation of laws regulated by the CFPB can carry all of the following fines EXCEPT:
- A.
  
  $1,000 a day
- B.
  
  $5,000 a day
- C.
  
  $25,000 a day
- D.
  
  $1,000,000 a day
Correct Answer
A. $1,000 a day

Explanation
The penalties for violations of laws regulated by the CFPB can carry fines of $5,000 a day, $25,000 a day, or even $1,000,000 a day. However, the exception is that the fine of $1,000 a day is not applicable for violations.

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6.

The Fair Housing Act was passed as a memorial to who's life?
- A.
  
  Lyndon Johnson
- B.
  
  Martin Luther King, Jr
- C.
  
  John F Kennedy
- D.
  
  Frank Dodd
Correct Answer
B. Martin Luther King, Jr

Explanation
The Fair Housing Act was passed as a memorial to Martin Luther King, Jr's life. Martin Luther King, Jr was a prominent civil rights leader who advocated for equal rights and an end to racial discrimination. His assassination in 1968 prompted the passage of the Fair Housing Act in 1968, which aimed to prevent discrimination in housing based on race, color, religion, sex, or national origin. The act was a significant step towards achieving equality and justice in housing opportunities for all Americans.

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7.

Who has the enforcement duties for the Fair Lending laws and regulations such as ECOA and HMDA?
- A.
  
  The Federal Financial Bureau
- B.
  
  Consumer Financial Protection Bureau
- C.
  
  Congress
- D.
  
  Department of Housing and Urban Development
Correct Answer
B. Consumer Financial Protection Bureau

Explanation
The Consumer Financial Protection Bureau has the enforcement duties for the Fair Lending laws and regulations such as ECOA and HMDA.

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8.

Which of the following would NOT be a basis for an individual being considered to be in a protected class?
- A.
  
  Race
- B.
  
  Sex
- C.
  
  Education
- D.
  
  Religion
Correct Answer
C. Education

Explanation
Education would not be a basis for an individual to be considered to be in a protected class. Protected classes are groups of people who are protected from discrimination under the law. Race, sex, and religion are all characteristics that are commonly recognized as protected classes. However, education level or attainment is not typically considered a protected class because it does not have the same historical or social significance as the other categories.

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9.

The primary reason ECOA was established was the discriminatory treatment of:
- A.
  
  Teenagers
- B.
  
  Women
- C.
  
  Aliens
- D.
  
  Christians
Correct Answer
B. Women

Explanation
The Equal Credit Opportunity Act (ECOA) was established to address the discriminatory treatment of women in credit transactions. Before the ECOA, women were often denied credit or charged higher interest rates based solely on their gender. This legislation aimed to ensure that women were given equal access to credit and were not discriminated against based on their sex. By prohibiting credit discrimination on the basis of gender, the ECOA aimed to promote fairness and equal opportunities for women in the credit industry.

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10.

Mortgage lending laws in the United States reflect a commitment to the belief that access to home loans should be available to all consumers who can demonstrate creditworthiness and based on accurate personal financial information.
- A.
  
  True
- B.
  
  False
Correct Answer
A. True

Explanation
The explanation for the given correct answer is that mortgage lending laws in the United States are designed to ensure that all consumers who can demonstrate creditworthiness and provide accurate personal financial information have access to home loans. This reflects a commitment to the belief that homeownership should be accessible to everyone, regardless of their background or financial situation.

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Fair Lending Final Quiz

What was the first act passed in regard to Fair Lending?

Which act established the CFPB?

Which of the following acts is NOT directly related to fair lending?

Fair Lending is defined as, “fair, equitable, and nondiscriminatory access to credit for consumers.”

Penalties for each violation of laws regulated by the CFPB can carry all of the following fines EXCEPT:

The Fair Housing Act was passed as a memorial to who's life?

Who has the enforcement duties for the Fair Lending laws and regulations such as ECOA and HMDA?

Which of the following would NOT be a basis for an individual being considered to be in a protected class?

The primary reason ECOA was established was the discriminatory treatment of:

Mortgage lending laws in the United States reflect a commitment to the belief that access to home loans should be available to all consumers who can demonstrate creditworthiness and based on accurate personal financial information.