CUCE - Consumer lending regulations UPDATED Actual Exam Questions and CORRECT Answers
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Course
CUCE - Consumer lending regulations
Institution
CUCE - Consumer Lending Regulations
CUCE - Consumer lending regulations
UPDATED Actual Exam Questions and
CORRECT Answers
If you discover an unintentional error in complying with reg Z requirements, what corrective
action must you take? - CORRECT ANSWER- You must: notify the affected member,
and make appropriate adjustments w...
CUCE - Consumer lending regulations
UPDATED Actual Exam Questions and
CORRECT Answers
If you discover an unintentional error in complying with reg Z requirements, what corrective
action must you take? - CORRECT ANSWER✔✔- You must: notify the affected member,
and make appropriate adjustments within 60 days after discovering the error and before any
legal action has begun or any member gives written notice of the error.
Reg Z defines "finance charge" as the cost of consumer credit in a dollar amount. The
regulation provides a list of the types of charges that must be considered as components of
the finance charge. Name four of those charges. - CORRECT ANSWER✔✔- (1) Interest,
time/price differentials, and amounts payable under an add-on or discount system of
additional charges; (2) service fees, transaction fees, activity charges, and carrying charges;
(3) points, loan fees, assumption fees, finders fees, and similar charges; (4) appraisal fees,
investigation fees, and credit report fees; (5) premiums or other charges for any guarantee or
insurance that protects your credit union against a members default or other credit loss; (6)
charges that your credit union pays to another person for purchasing or excepting a loan, if
the member is obligated to pay the charges either in cash, as an additional amount on the
obligation, or as a deduction from the loan proceeds; (7) premiums or other charges for credit
life, health, accident, or loss of income insurance obtained in connection with a credit
transaction; (8) premiums or other charges for loss of or damage to property, or against the
liability that arises out of the ownership or use of property.
Reg Z provides specific accuracy requirements for APR's in both open and closed-end credit.
What are those requirements? - CORRECT ANSWER✔✔- For both open and closed end
credit the APR must be within 1/8 of a percentage point above or below the determined APR.
However for a regular transactions and closed end credit, the percentage can be 1/4 of a
percentage point above or below.
The special rules for credit cards allow the member to withhold payment of up to the full
amount of the transaction plus any finance charge imposed on the amount when there is an
unresolved dispute between the member and a merchant. What three conditions must be met
before this rule can apply? - CORRECT ANSWER✔✔- This rule applies when: the member
has made a good-faith attempt to resolve the dispute; the amount involved is greater than $50;
and the transaction occurs in the member's state or within 100 miles of the member's current
address.
, When a member notifies the credit union, in writing, of a billing error on an open-end credit
plan, what are the three steps the credit union must take per Reg Z? - CORRECT
ANSWER✔✔- The credit union must: send the member a written acknowledgment of receipt
of the claim within 30 days; resolve the claim within the allowable timeframe; and avoid
certain actions (such as trying to collect the amount, imposing a finance charge on the
amount, reported to the credit reporting agency, or restrict or close the account).
Regulation Z requires credit unions to promptly credit payments made on open-end credit
accounts. What are the rules governing this? - CORRECT ANSWER✔✔- Prompting
crediting of payment rules: credit as of day of receipt; provide payment specifications on or
with the periodic statements; adjust for failure to credit the payment timely; and handle credit
balances as required.
If a member reassert a billing error claim after the initial investigation has been completed,
what is the credit union's duty? - CORRECT ANSWER✔✔- The credit union is not obligated
to reinvestigate the claim. However, if the account has been reported to a credit reporting
agency, the credit union must: inform the agency the amount is in dispute; provide the
member with the name and address of the agencies notified; and promptly report any
resolutions to those agencies.
There are three general disclosure requirements for open end credit disclosures. One is that
the disclosures be made in a clear and conspicuous manner. What are the other two? -
CORRECT ANSWER✔✔- They must be: in writing, and in a form the member may keep.
Reg Z requires credit unions to provide periodic statements to members with open end credit
for each bill and cycle that if finance charge imposed or there is a debt or credit balance of a
$1.00. These statements must be provided at least quarterly. What are the required items for
this statement. - CORRECT ANSWER✔✔- Required information for periodic statements:
previous balance; identification of transactions; credits to the account; periodic rates; balance
for computing finance charge; finance charge; annual percentage rate; other charges; closing
date; new balance; grace period; address for billing error notice; and liability notice for credit
card plans.
When you change an account term or condition that is required to be disclosed under Reg Z
or increase a minimum payment requirement and that change is not one of the exceptions
provided in the regulation, what is the notification requirement for the change? - CORRECT
ANSWER✔✔- You must mail or deliver written notice of the change at least 45 days before
it's effective date.
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