Fair Lending Laws! Trivia Quiz
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Community First Bank and Trust's Identity Theft Red Flag Program covers the following items:
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"Reasonable" policies and procedures
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"Continued" administration of the program
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Considers "Interagency Guidelines on Identity Theft Detection, Prevention, and Mitigation
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All of the above.
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Test your knowledge about fair lending laws by taking this trivia quiz. On what basis can you reject someone’s loan application? The quiz is perfect for testing out just how much you know about these laws and what they mean to the banking sector as a whole. Give it a shot and get to understand the reasoning behind them a little better.
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- 2.
Community First Bank and Trust is NOT a ________________ according to the FCRA:
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Credit grantor
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Credit Reporting Agency
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Employer
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User
Correct Answer
A. Credit Reporting AgencyExplanation
Community First Bank and Trust is not considered a Credit Reporting Agency according to the FCRA. This means that the bank is not involved in collecting, maintaining, or providing consumer credit information to third parties. While the bank may grant credit to individuals, it does not have the primary function of reporting credit information to other entities.Rate this question:
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- 3.
What regulation implements the Equal Credit Opportunity Act?
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Regulation A
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Regulation DD
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Regulation B
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Regulation Z
Correct Answer
A. Regulation BExplanation
Regulation B implements the Equal Credit Opportunity Act. This regulation prohibits lenders from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age, or because an applicant receives public assistance. It outlines the requirements and procedures that lenders must follow to ensure fair lending practices and equal access to credit for all individuals.Rate this question:
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- 4.
Primary responsibility for administering the provisions of the Fair Housing Act rests with the FDIC.
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TRUE
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FALSE
Correct Answer
A. FALSEExplanation
The correct answer is FALSE. The primary responsibility for administering the provisions of the Fair Housing Act does not rest with the FDIC. The Fair Housing Act is actually administered by the U.S. Department of Housing and Urban Development (HUD). The FDIC is a federal agency that is responsible for insuring deposits in banks and thrift institutions, promoting safe and sound banking practices, and protecting consumers against unfair and deceptive practices in the financial industry.Rate this question:
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- 5.
A "Notice to the Home Loan Applicant" must be made in connection with:
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An application for a closed-end loan
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An application for an open-end credit plan for a consumer purpose secured by 1-4 units of residential real property
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A commercial transaction securing residential real property
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Both A and B.
Correct Answer
A. Both A and B.Explanation
A "Notice to the Home Loan Applicant" must be made in connection with both an application for a closed-end loan and an application for an open-end credit plan for a consumer purpose secured by 1-4 units of residential real property. This means that whenever a person applies for either of these types of loans, the lender is required to provide them with the "Notice to the Home Loan Applicant" document. It is important for the applicant to receive this notice as it contains important information about their rights and responsibilities as a borrower.Rate this question:
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- 6.
The Gramm-Leach-Bliley Act of 1999 requires financial institutions to provide disclosures:
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At the time of establishing a customer relationship.
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Monthly.
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Annually.
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Both A and C
Correct Answer
A. Both A and CExplanation
The Gramm-Leach-Bliley Act of 1999, also known as GLBA, mandates that financial institutions must provide disclosures to customers at the time of establishing a customer relationship and annually. This means that when a customer begins a relationship with a financial institution, they should receive disclosures regarding the institution's privacy policies and practices. Additionally, the institution is required to provide annual disclosures to ensure that customers are continuously informed about any changes in the privacy policies or practices. Therefore, the correct answer is "Both A and C".Rate this question:
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- 7.
When a lender applies a policy or practice equally to credit applicants, but the policy or practice has a disproportionately adverse affect on a protected group, the policy or practice is described as:
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Disparate treatment
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Disparate Impact
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Overt Discrimination
Correct Answer
A. Disparate ImpactExplanation
Disparate Impact refers to a situation where a lender applies a policy or practice equally to all credit applicants, but it has a disproportionately adverse effect on a protected group. This means that even though there may not be an intention to discriminate, the policy or practice still results in unfair treatment or disadvantage for certain groups. Disparate Impact is a concept used to identify and address unintentional discrimination in lending practices.Rate this question:
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- 8.
A "Notice of Joint Intent" applies to Commercial customers as well as Consumers.
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TRUE
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FALSE
Correct Answer
A. TRUEExplanation
A "Notice of Joint Intent" is a legal document that is used when two or more parties intend to enter into a joint business venture or transaction. This notice is typically required by law to be given to the other party/parties involved to ensure transparency and informed consent. Since both commercial customers and consumers can enter into joint ventures or transactions, it is true that a "Notice of Joint Intent" applies to both.Rate this question:
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- 9.
The 3 Primary Purposes of the Fair Credit Reporting Act are:
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Regulate the consumer reporting industry
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Establish a way for financial institutions to pull credit reports on everyone without permissible purposes.
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Place disclosure obligations on users of consumer reports
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Ensure timely, fair, and accurate reporting of credit information
Correct Answer(s)
A. Regulate the consumer reporting industry
A. Place disclosure obligations on users of consumer reports
A. Ensure timely, fair, and accurate reporting of credit informationExplanation
The Fair Credit Reporting Act has three primary purposes. First, it aims to regulate the consumer reporting industry, ensuring that it operates in a fair and ethical manner. Second, it establishes a system for financial institutions to access credit reports on individuals, but only for permissible purposes. Lastly, the act places disclosure obligations on users of consumer reports, ensuring that individuals are aware of how their information is being used. Additionally, the act aims to ensure that credit information is reported in a timely, fair, and accurate manner.Rate this question:
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Current Version
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Mar 19, 2023Quiz Edited by
ProProfs Editorial Team -
Jul 13, 2010Quiz Created by
Amy_Greene
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