Fair Lending Final Quiz

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BJULIANNAM
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Quizzes Created: 3 | Total Attempts: 1,032
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  • 1/10 Questions

    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.

    • True
    • False
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About This Quiz

The 'Fair Lending Final Quiz' assesses knowledge on laws ensuring fair access to credit. It covers key acts like the Fair Housing Act and the Dodd-Frank Act, defining fair lending principles and examining penalties for violations. Essential for understanding consumer rights and regulatory compliance.

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  • 2. 

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

    • True

    • 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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  • 3. 

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

    • Teenagers

    • Women

    • Aliens

    • Christians

    Correct Answer
    A. 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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  • 4. 

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

    • Race

    • Sex

    • Education

    • Religion

    Correct Answer
    A. 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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  • 5. 

    Which act established the CFPB?

    • ECOA

    • Fair Housing Act

    • Dodd-Frank Act

    • SAFE Act

    Correct Answer
    A. 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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  • 6. 

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

    • $1,000 a day

    • $5,000 a day

    • $25,000 a day

    • $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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  • 7. 

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

    • Fair Housing Act

    • Equal Credit Opportunity Act

    • Home Mortgage Disclosure Act

    • 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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  • 8. 

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

    • Fair Housing Act

    • Equal Credit Opportunity Act

    • Homeowners Protection Act

    • Home Ownership and Equity Protection Act

    Correct Answer
    A. 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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  • 9. 

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

    • Lyndon Johnson

    • Martin Luther King, Jr

    • John F Kennedy

    • Frank Dodd

    Correct Answer
    A. 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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  • 10. 

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

    • The Federal Financial Bureau

    • Consumer Financial Protection Bureau

    • Congress

    • Department of Housing and Urban Development

    Correct Answer
    A. 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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Quiz Review Timeline (Updated): Jul 2, 2024 +

Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Jul 02, 2024
    Quiz Edited by
    ProProfs Editorial Team
  • Jun 20, 2012
    Quiz Created by
    BJULIANNAM
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