Deck 27: Consumer Credit Transactions

Question 1

Entry of a confession of judgment entitles the creditor to attach the debtor's assets to satisfy the debt.

Answer 1

True

Question 2

The Fair Credit Billing Act applies to unsatisfactory goods or services purchased by credit card.

Answer 2

True

Question 3

The Fair Credit and Charge Card Disclosure Act requires that credit card issuers disclose the annual percentage rate, annual fees, grace period, and other information on credit card applications.

Answer 3

True

Question 4

The Fair Credit Billing Act gives the creditor three days to respond to and rectify claimed errors.

Question 5

The Truth in Lending Act protects business-entity debtors as well as consumers.

Question 6

The Federal Trade Commission regulation gives consumers three days to cancel contracts made with door-to-door salespersons.

Question 7

The federal wage-garnishment law states that an employee fired for having one debt garnished may sue the employer for damages.

Question 8

Under the Fair Debt Collection Practices, collectors are no longer allowed to file suits in remote places in order to obtain default judgments.

Question 9

The Fair Credit Billing Act applies to open-end credits and installment sales.

Question 10

The Annual Percentage Rate (APR) is another way to state a loan's interest.

Question 11

Although states may set their own usury rates, the penalties for violation are-like bankruptcy law-federal and uniform.

Question 12

Title I of the Consumer Credit Protection Act is popularly known as the Truth in Lending Act.

Question 13

Garnishment, wage assignment, and confession of judgment are means of debt recovery.

Question 14

The penalties for violating usury laws are the same in all the states of the U.S.

Question 15

Creditors who violate the Truth in Lending Act are subject to criminal sanctions but not civil sanctions.

Question 16

Under the Fair Credit Reporting Act, an applicant denied credit has the right to be told the name and address of the credit bureau that prepared the report on which the denial was based.

Question 17

A wage assignment is an agreement by an employee that a creditor may take future wages as security for a loan or to pay an existing debt.

Question 18

Tight limits on credit rates may harm low-income persons.

Question 19

The Truth in Lending Act protects natural-person debtors and business organization debtors.

Question 20

When the government-state or federal-allows inexpensive credit the move is usually politically unpopular.

Question 21

_____ is an agreement by an employee that a creditor may take future wages as security for a loan or to pay an existing debt.

A) Garishment
B) Wage assignment
C) Confession of judgment
D) Sequestration
E) Interception

Question 22

A written agreement in which the defendant in a lawsuit admits liability and accepts the amount of agreed-upon damages that must be paid to the plaintiff is known as a(n) _____ agreement.

A) interception
B) confession of judgment
C) garishment
D) wage assignment
E) sequestration

Question 23

Which of the following acts ensured that every individual who has need for consumer credit is given full disclosure of the finance charge and the annual percentage rate of interest?

A) Truth in Lending Act
B) Fair Credit and Charge Card Disclosure Act
C) Credit Card Accountability, Responsibility, and Disclosure Act
D) Fair Credit Reporting Act
E) Consumer Leasing Act

Question 24

In the 1960s married couples were sometimes told that a bank would grant them credit if the wife would get a hysterectomy.

Question 25

Which of the following acts restricts card issuers from providing tangible gifts to students on college campuses in exchange for filling out a credit card application?

A) Fair Credit Reporting Act
B) Fair Credit Billing Act
C) Consumer Leasing Act
D) Fair Credit and Charge Card Disclosure Act
E) Credit Card Accountability, Responsibility, and Disclosure Act

Question 26

_____ is the practice by a financial institution of refusing to grant home loans or home-improvement loans to people living in low-income neighborhoods.

A) Blockbusting
B) Inclusionary zoning
C) Cream skimming
D) Redlining
E) Constructive eviction

Question 27

Critics of the Consumer Financial Protection Bureau assert that it unduly burdens creditors, banks, and financial institutions at the consumer level.

Question 28

In 1970, Congress enacted the _____ to give consumers access to their credit files in order to correct errors.

A) Fair Credit Reporting Act
B) Fair Credit Billing Act
C) Equal Credit Opportunity Act
D) Uniform Consumer Credit Act
E) Fair Credit and Charge Card Disclosure Act

Question 29

Which of the following is true of the Fair Credit Reporting Act?

A) Adverse information from the person's credit report must be removed after three years.
B) A person is entitled to a free copy of his or her credit report from each of the three main credit bureaus every six months.
C) An applicant denied credit has the right to be told the name and address of the credit bureau that prepared the report on which the denial was based.
D) The agency must furnish the consumer the information free if requested within a year of the rejection.
E) Any person who obtains information from a credit agency under false pretenses is subject only to civil penalties.

Question 30

The _____ amended the Truth in Lending Act by requiring credit card issuers to disclose in a uniform manner the annual percentage rate, annual fees, grace period, and other information on credit card applications.

A) Fair Credit Reporting Act
B) Consumer Leasing Act
C) Truth in Lending Act
D) Fair Credit and Charge Card Disclosure Act
E) Credit Card Accountability, Responsibility, and Disclosure Act

Question 31

Which of the following provisions regarding the Fair Credit Billing Act is accurate?

A) During the time the creditor is replying, the customer is required to pay back the questioned item.
B) The act allows a customer 90 days to notify the creditor of the nature of the error and the amount.
C) In case of an error, the creditor has 120 days to respond and 150 days to correct the customer's account.
D) The act applies only to open-end credit and not to installment sales.
E) The Congress enacted this act as an amendment to the Fair Credit Reporting Act.

Question 32

The _____ is the total of all money paid for credit.

A) prime rate
B) floor limit
C) finance charge
D) balloon payment
E) floating rate

Question 33

"Redlining" is the process of deleting incorrect credit charges on a consumer's account.

Question 34

Under the _____, a creditor may not ask a credit applicant to state sex, race, national origin, or religion.

A) Fair Credit and Charge Card Disclosure Act
B) Equal Credit Opportunity Act
C) Home Mortgage Disclosure Act
D) Community Reinvestment Act
E) Fair Credit Reporting Act

Question 35

Which of the following is true of the Truth in Lending Act?

A) It is part of the Consumer Leasing Act.
B) It protects natural-person debtors.
C) It establishes maximum interest rates.
D) It regulates open-end credits.
E) It does not regulate credit-card transactions.

Question 36

An investigative report, as part of a dossier collected to determine if a person should get credit, cannot include such items as that the applicant drinks heavily, or is engaged in dangerous sports (like paragliding).

Question 37

_____ is a legal process by which a creditor can obtain a court order directing the debtor's employer or any party who owes money to the debtor to pay directly to the creditor a certain portion of the employee's wages until the debt is paid.

A) Wage assignment
B) Confession of judgment
C) Sequestration
D) Interception
E) Garishment

Question 38

Under the Equal Credit Opportunity Act a creditor may not ask if the credit applicant is married.

Question 39

Under the Equal Credit Opportunity Act:

A) alimony received and child support payments are not considered sources of income.
B) questions concerning plans for children should be asked before sanctioning credit.
C) if the credit is refused, the creditor, on demand, must disclose the reasons for rejection.
D) the creditor must ask all credit applicants for a statement of marital status.
E) a spouse is required to cosign irrespective of the other spouse's creditworthiness.

Question 40

The Home Mortgage Disclosure Act, 1975, and the Community Reinvestment Act, 1977, prohibit:

A) constructive eviction.
B) blockbusting.
C) inclusionary zoning.
D) cream skimming.
E) redlining.

Question 41

Outline some of the provisions of the Truth in Lending Act (TILA)?

Question 42

What are the three different means of recovering debt?