CFPB Mortgage Compliance Training (MCT) 3 Practice Test

These questions are part of the practice quiz. Start practicing

• Which type of account would best serve a local fire district looking for a higher interest rate with no access to funds for 36 months?
• What is "foreclosure"?
• Which of the following is NOT a requirement of the CFPB?
• When may a creditor ask about an applicant's marital status?
• If your advertisement states a rate, is it acceptable to state the abbreviation APY without spelling out annual percentage yield?
• Which scenario would NOT cause a compliance violation?
• Within how many days must a creditor deny an incomplete application or provide a notice of incompleteness?
• What role does the Office of Fair Lending and Equal Opportunity play?
• Which of the following does NOT describe an adverse action?
• When a consumer inquires about a current rate on a 1-year certificate of deposit, what must the institution provide?
• Which feature describes a private education loan?
• What does the Servicemembers Civil Relief Act provide?
• What does APR stand for in mortgage terms?
• Which statement is false regarding disclosures when opening a joint checking account?
• What are "escrow accounts" used for?
• Which of the following best describes a deceptive practice under consumer credit laws?
• What is indicated by the necessity to verify a customer's identity when opening an account?
• Which of the following is accurate regarding The Fair Credit Reporting Act (FCRA)?
• A credit card lender that prescreens consumers must retain a record of the criteria used for at least how many months?
• What is the impact of the repeal of the Appraisal Protection Rule?
• When should a bank provide a summary of a remittance transfer?
• What does Regulation Z under the Truth in Lending Act provide?
• What document must borrowers receive before closing on a loan?
• What does the HPA require regarding the cancellation of PMI?
• Under what condition can a servicer resume collection efforts?
• What is the compliance requirements deadline for overdraft protection?
• What does the acronym MBS stand for?
• According to the Fair Credit Billing Act (FCBA), what is the maximum number of days a credit cardholder has to dispute a billing error?
• Advertisements that state a rate must include what?
• Which of the following is NOT one of the four key features of a Qualified Mortgage?
• What constitutes the primary focus of TISA compliance?
• How long do you have to determine that an error has occurred in remittance transfers?
• Which agency is responsible for enforcing the Home Mortgage Disclosure Act (HMDA)?
• Which term describes a lump-sum payment made at closing to lower the interest rate?
• In a mortgage context, what does "default" mean?
• Which action must lenders take when a mortgage is deemed "high-cost"?
• Is it true that financial institutions must establish identity and legal capacity when opening accounts?
• Are account holders required to be notified of overdraft fees according to Regulation E?
• What is the Dodd-Frank Act?
• Under the CFPB, what is "fair debt collection"?
• Which statement is TRUE regarding consumers opting in for overdraft protection?
• Which of the following qualifies as an advertisement?
• How does banking partnerships and outsourcing benefit banks?
• What is the purpose of the RESPA Section 8 regulation?
• What does TILA stand for?
• How many days before the grace period expires must a periodic statement be provided to the borrower?
• What must a lender notify applicants about regarding credit outcomes?
• What is true about a bank's protection against a third party's transaction coding error?
• Under the Unfair, Deceptive or Abusive Acts or Practices statutes, when is a practice considered deceptive?
• Which of the following statements about credit card regulations is correct?
• Which document must a remittance provider give to a sender when making a remittance transfer?
• What is a "prepayment penalty"?
• Which of the following is a requirement for a loan to be considered a Qualified Mortgage?
• What is "underwriting" in the context of mortgage lending?
• Which act allows credit cardholders the right to dispute billing errors?
• What method can a consumer use to sign up for overdraft protection?
• Which agency plays a crucial role in overseeing compliance with mortgage regulations?
• What is the purpose of RESPA?
• What is the maximum age to qualify for a HECM?
• How should lenders communicate with consumers according to CFPB guidelines?
• Which consumer law imposes requirements for mortgage servicing transfers and continuity of contact for delinquent borrowers?
• Which of the following is a duty of a mortgage servicer when a borrower is paying as agreed?
• What does "loan servicing" refer to?
• How many days before closing must the Closing Disclosure be provided?
• Before imposing an over-the-limit fee, what notice must a credit card lender provide?
• The Fair Credit Reporting Act primarily governs what aspect of credit reporting?
• Which entity establishes rules under the TILA-RESPA Integrated Disclosure?
• What does the acronym HPA stand for?
• Who is eligible for VA loans?
• What does the term "force-placed insurance" refer to in mortgage servicing?
• How many days prior must Community Credit Card Company notify its borrowers about an increase in the annual membership fee?
• Which factor is NOT considered part of the Ability-to-Repay rule?
• An account held in joint tenancy requires the account holders to act together and both signatures are required for withdrawals.
• In what situation would a short sale be necessitated?
• When are taxes due if they are assessed a late fee on December 1?
• If Molly Mingle purchases a sweater with her ATM card and is unsure of her account balance, is her transaction considered covered?
• Are institutions that repeatedly violate TISA likely to face cease and desist orders and civil money penalties?
• Which item is NOT permitted when evaluating an application under regulations?
• Which fee is included in the points and fees coverage test?
• What is the primary goal of the CFPB's Office of Consumer and Community Affairs?
• If a consumer becomes delinquent, within how many days must the credit card lender report the delinquency to the credit bureau?
• If an APY appears in an advertisement, what must the ad also include?
• If a customer only inquires about rates or fees, must you provide written account disclosures?
• What is the purpose of the CFPB's "Know Before You Owe" initiative?
• Which statement is true regarding credit card lenders and prescreening?
• If an institution fails to provide written disclosures in certain scenarios, what is the outcome?
• What is the purpose of the Ability-to-Repay rule?
• What is the primary focus of the Equal Credit Opportunity Act (ECOA)?
• What is a "short sale" in real estate?
• What are "settlement costs"?
• What does the term "Qualified Mortgage" refer to?
• What is the significance of the Consumer Complaint Database?
• Within how many days must a borrower receive a Loan Estimate after applying for a loan?
• Which mortgage disclosure is required under the TILA-RESPA Integrated Disclosure rule?
• Which of the following is a goal of the CFPB?
• When a bank raises its annual fee on a credit card, what is the minimum time frame to notify consumers before the change takes effect?
• What must a financial institution provide before a consumer signs up for overdraft protection?
• What does APR stand for in mortgage terms?
• Which document helps borrowers understand the wealth of their monthly obligations and payment history?
• What happens if a consumer opts in for overdraft protection?
• Which of the following is true about the Consumer Financial Protection Bureau (CFPB)?
• Which of the following documents summarizes loan terms and estimated closing costs?
• Why might a bank consider a merger or acquisition?
• What type of mortgage product would have a rate that can change over time?
• What is considered a prohibited fee?
• In case of deceptive practices, which credit card offer would be against regulation?
• What must initial disclosures under the EFTA provide?
• How should an advertisement for an account that features an interest rate be structured?
• Which of the following is an objective of Regulation Z?
• When a lender decreases a credit limit, what must they inform the consumer about?
• A credit card holder can dispute a billing error under the FCBA within how many days of the billing date?
• Which action is NOT necessary when advertising interest rates according to compliance?
• What is not included in the definition of "inadvertent error"?
• What is a critical factor for lenders in a fair lending context?
• Which of the following statements is true regarding potential Regulation B violations?
• The head of the organization chart is the ________, which is the governing body of the organization.
• What can a lender do if a consumer rejects a credit card APR increase?
• According to regulations, fees a consumer is required to pay cannot exceed what percentage of the total credit limit available at account opening during the first year?
• What is the timeframe within which lenders must notify borrowers of their loan status following a default?
• Which of the following statements is true about Regulation B?
• What is a primary benefit of the Equal Credit Opportunity Act?
• What is the primary responsibility of a bank employee?
• Which of the following statements is NOT true regarding creditor considerations for applications?
• What is required for a financial institution to provide an opt-in notice?
• What is the closing process in real estate transactions?
• What constitutes a "high-cost mortgage"?
• What information must be included in the opt-in notice?
• What is the primary difference between an adjustable-rate mortgage (ARM) and a fixed-rate mortgage?
• Which action by a debt collector is considered prohibited conduct?
• What is the significance of the CFPB’s supervisory authority?
• What does HMDA help to identify?
• Which of the following is NOT a protected class under the Fair Housing Act?
• Which of the following could be viewed as a factor during the evaluation of loan applications?
• What does the acronym RESPA stand for?
• According to PMI regulations, when must final termination occur if it hasn't been canceled or automatically terminated?
• What is a primary purpose of the Community Reinvestment Act (CRA)?
• Which regulation forbids discouraging applicants or prospective applicants from making or pursuing a loan application on any prohibited basis?
• What can result from non-compliance with mortgage regulations?
• Can federally insured credit card lenders charge any interest rates based on the state they operate in?
• If two or more consumers jointly hold an account, what can one joint consumer do?
• Under which act is the Home Mortgage Disclosure Act (HMDA) enforced?
• What happens if a consumer rejects an increase in their credit card APR?
• What is the main goal of ECOA?
• Under TILA, if a credit card advertisement includes certain triggering terms, which item is NOT considered a triggering term?
• According to Regulation B, which of the following actions constitutes an adverse action?
• What is required of First Credit Card Financial regarding the annual renewal fee?
• Which information must be disclosed in a Loan Estimate?
• The benefits of using the Adjusted Balance method for finance charges are primarily advantageous for which type of consumer?
• What is a true statement regarding a transfer scheduled in advance?
• Scott originates a closed-end adjustable rate mortgage with a 3% introductory rate for two years. What APR must he use in applying the APR coverage test?
• What does the acronym NMLS stand for?
• Are checks written by Smith and Wesson Attorneys at Law on their account considered covered transactions?
• What type of discrimination occurs when a lender refuses to lend to an applicant based on their ethnicity?
• If Jane Smith loses her credit card and reports it two days later, what is her liability for unauthorized charges?
• What did Title 10 of the Dodd-Frank Act establish?
• Which of the following is an obligation of the remittance provider when a transfer is executed?
• What does the debt-to-income (DTI) ratio compare?
• In relation to Regulation E, which transaction type must a bank be cautious about for overdraft fees?
• How long must Big City Bank provide notice before increasing its credit card annual fee?
• What is the main purpose of TISA?
• What is a primary residence according to mortgage compliance terminology?
• What requirement must lenders follow regarding advertising under TILA?
• What does TRID stand for?
• Under which regulation must lenders provide borrowers with information regarding the cost of credit?
• How does loan modification typically benefit borrowers?
• What is "loan modification"?
• What type of discrimination is displayed when a lender treats applicants differently based on race or gender?
• Which entity is responsible for enforcing fair lending laws within the CFPB?
• What is usually the most advantageous method for calculating the finance charge on credit card accounts for consumers?
• What are the typical features of a conventional mortgage?
• Targeted marketing of optional products or services on the basis of race may indicate an increased risk of potential ________ violations.
• What must a servicer do when a credit balance greater than $1 is created in a consumer's account?
• Which act imposes requirements for collection activities?
• What does a FICO score represent?
• Which of the following best describes a joint tenancy account?
• What is the liability for unauthorized charges made on a credit card between when it is lost and reported if it results in a combination of $60 and $100?
• Which statement accurately reflects what creditors can consider when evaluating loan applications?
• What does ECOA stand for?
• Which is NOT likely a consequence of a minor, first-time TISA violation?
• What does the acronym CLTV stand for?
• Which of the following is an example of a practice prohibited under credit card regulations?
• How does the CFPB define a "consumer financial product"?
• What does PMI stand for?
• What does CFPB stand for?
• If a consumer has properly disputed a debt in writing, what action cannot be taken?
• True or False: The Telephone Consumer Protection Act (TCPA) and the Telemarketing Sales Rule govern telephone solicitations and establish what are permissible and prohibited practices.
• What is considered an advertisement in relation to a financial institution?
• What triggers the requirement for flood insurance under the Flood Disaster Protection Act?
• What type of discrimination occurs when the assistance provided to applicants is unequal?
• What potential outcome might arise from a borrower defaulting on their mortgage?
• Under the FCRA, which of the following must be included in an adverse action notice if credit is denied?
• Which is an acceptable practice in credit card loan management?
• What does crediting typically involve?
• What is the purpose of the Loan Originator Compensation Rule?
• What is a common way for banks to support their communities?
• Which of the following would be considered a deceptive act or practice?
• When is it permissible for a creditor to consider children as a part of the loan evaluation?
• When is it required to reevaluate an APR?
• What are "origination fees"?
• Which consumer law imposes requirements on mortgage servicers regarding periodic billing statements and crediting of payments?
• How frequently must credit card companies send out billing statements to consumers?
• Which information must financial institutions request from loan applicants for a principal dwelling?
• What is a HECM loan?
• What is it called when a loan originator persuades a consumer to consummate a transaction based on greater compensation for the originator?
• What does TILA prohibit?
• What happens during the foreclosure process?
• What describes the primary characteristic of a prescreening process?
• What type of account is opened after someone dies?
• Which statement is true regarding an ad that claims a credit card offers a 7.25% annual rate with no balance transfer fee?
• What type of loans does Title 14 of the Dodd-Frank Act specifically regulate?
• What does the Closing Disclosure provide?
• What did Title 14 of the Dodd-Frank Act prohibit?
• Which document must accompany a mortgage application for compliance?
• What is one of the objectives of the Servicemembers Civil Relief Act?
• What is the purpose of the NMLS?
• True or False: A solicitation must contain the Consumer Financial Protection Bureau's website address for information on credit cards.
• What is prescreening in the context of credit card lending?
• What is the primary focus of the Fair Housing Act?
• Which activity is part of loan servicing?
• What is a Loan Estimate?
• If a consumer is represented by an attorney, who is the only person you can contact about the debt of the consumer?
• Who enforces the Fair Credit Reporting Act?
• What does Regulation B require regarding collections processes?
• Can a consumer revoke their consent to overdraft protection at any time?
• A bank's ability to charge overdraft fees for which type of transaction is limited by Regulation E?
• What type of mortgage allows seniors to convert home equity into cash without monthly mortgage payments?
• Why are escrow accounts essential for homeowners?
• Which of the following best defines the role of the CFPB?
• Why do banks engage in partnerships?
• What is considered a "business day" under TRID rules?
• Which document details the terms of a mortgage loan and ensures transparency for the borrower?
• What action can a consumer take regarding overdraft protection at any time?
• What are "points" in relation to mortgage loans?
• What is the penalty for violating the Home Mortgage Disclosure Act (HMDA)?
• What is the primary purpose of the CFPB?
• What type of account is characterized by having a specific maturity date and cannot have funds withdrawn early without penalty?
• What does the "Red Flags Rule" require businesses to implement?
• What is the primary purpose of the Fair Lending Act?
• What is a conforming loan?