CR7 - Fair Lending

B 9EA790EB00BE435D9002C9FAE81C5596 Not answered. The correct answer is b. A, C, and D are incorrect because the way question number one was asked, asking about which country the client is from, is illegal. The banker can, however, ask about the immigration status of a client. A Question about how long a particular source of income is expected to last is allowable as long as the customer wishes to rely on that income to qualify for the loan.

1. During a loan interview with a client, Bill asks these two questions: 1) What country are you from? 2) How long will you receive alimony and child support? Which statement is true regarding the legality of the questions? A. Neither question 1 or 2 are illegal B. Only question 1 is illegal C. Only question 2 is illegal D. Both questions are illegal

D AB3D828F66B9464E8C67E5023EEAC29E Not answered. The correct answer is d. A is incorrect because this is not a primary purpose of HMDA. B is incorrect because the ADA prohibits discrimination against persons with disabilities. C is incorrect because the FHA prohibits discrimination by housing-related real estate professionals.

1. What is one of the primary purposes of HMDA? A. To prevent disparate treatment B. To identify unlawful discrimination against persons with disabilities C. To prohibit discrimination by housing-related real estate professionals such as appraisers and real estate agents D. To identify possible discriminatory lending patterns and enforce antidiscrimination statutes by requiring the collection and disclosure of data about applicant and borrower characteristics

C C5B65048769F457EBB50EAE376D8A6A8 Not answered. The correct answer is c. A is incorrect because the question regarding children is illegal. B and D are incorrect because questions about immigration status and permanent residence are allowed under fair lending laws.

1. While helping a client complete a loan application, Brenda asks her customer ''What is your immigration status?'' and ''Do you plan on having children?'' Which statement is true regarding the legality of the questions? A. Both questions are allowed under fair lending laws B. Only the question regarding her client's immigration status is illegal C. Only the question regarding her plans to have children is illegal D. Both questions are illegal under fair lending laws

C 84DDB1EDDA4D4A82AA1A7E8BC5EDB046 Not answered. The correct answer is c. A is incorrect because this is not blatant discrimination directly linked to a prohibited basis. B is incorrect because this policy is applied consistently to all applicants. D is incorrect because this practice is a potential disparate impact.

10. A disabled client applies for a condo loan for $37,500 and is told the minimum real estate loan is $45,000. Which type of discrimination is possible? A. Overt discrimination B. Disparate treatment C. Disparate impact D. This is not discriminatory

B BF9CD4D23C344097BCB136BBCC1D5741 Not answered. The correct answer is b. A is incorrect because if public assistance income is a primary source of repayment, and without it, the client would not meet the debt-to-income ratio requirement, you may consider it when making the credit decision. C is incorrect because you may consider whether the applicant will continue to qualify for the income and the length of time public assistance income will be received, but you may not require information regarding the need for public assistance. D is incorrect because if the applicant qualifies for the loan without considering the public assistance income, the applicant is not required to provide that additional information.

10. Although lenders generally may not take into consideration any prohibited basis when determining creditworthiness, there are certain instances when taking a prohibited basis into consideration is allowed. Under what circumstance can the receipt of public assistance income be considered as a factor when making a credit decision? A. There are no circumstances under which a lender may ask about an applicant's receipt of public assistance income B. You may consider public assistance income if the income is a primary source of repayment, and without it, the client would not meet the debt-to-income ratio requirement C. You may consider income from public assistance but you must require documentation from the state as to why the public assistance is necessary D. If the applicant qualifies for the loan based on income other than public assistance income but tells you that he or she receives public assistance income, you are still required to document the amount of public assistance income received even if the applicant does not wish to provide it

C B34F56F26FB3433D92B085C89B47A5ED Not answered. The correct answer is c. A is incorrect because if public assistance income is a primary source of repayment, and without it, the client would not meet the debt-to-income ratio requirement, you may consider it when making the credit decision. B is incorrect because you may consider whether the applicant will continue to qualify for the income and the length of time public assistance income will be received, but you may not require information regarding the need for public assistance. D is incorrect because if the applicant qualifies for the loan without considering the public assistance income, the applicant is not required to provide that additional information.

10. Carlos is excited to get his first job as a loan assistant at his local community bank and wants to comply with all the antidiscrimination and fair lending laws. An applicant tells him that she is on public assistance. Carlos is having trouble remembering when and how the receipt of public assistance income can be considered in making a credit decision. Under what circumstance can the receipt of public assistance income be considered as a factor when making a credit decision? A. There are no circumstances under which a lender may ask about an applicant's receipt of public assistance income B. You may consider income from public assistance but you must require documentation from the state as to why the public assistance is necessary C. You may consider public assistance income if the income is a primary source of repayment, and without it, the client would not meet the debt-to-income ratio requirement D. If the applicant qualifies for the loan based on income other than public assistance income but tells you that she receives public assistance income, you are still required to document the amount of public assistance income received even if she does not wish to provide it

B 2B7ECBA9A4AE4E58B3B478904CD6791D Not answered. The correct answer is b. A is incorrect because you may consider marital status when it could affect your rights to any collateral for a loan. C is incorrect because this activity is prohibited by the FHA. D is incorrect because the ECOA only allows a bank to provide more preferable rates and terms to customers age 62 and older.

10. There are certain instances when taking a prohibited basis into consideration is allowed. One example of when you may consider a prohibited basis when evaluating a credit decision would be the marital status of the applicant. Which situation best describes when you can consider marital status when evaluating a credit request? A. You may never consider marital status when evaluating a credit request B. You may consider marital status when it could affect your rights to any collateral for a loan C. You may consider marital status in evaluating whether a female applicant will be starting a family soon and may quit her job and lose her income D. You may consider marital status when determining a preferable rate structure for a loan product designed for married applicants

B 8F9B24FEC15646B883937D2DD177E503 Not answered. The correct answer is b. A, C, and D are incorrect because the way question number one was asked, asking about which country the client is from, is illegal. The banker can, however, ask about the immigration status of a client. A Question about how long a particular source of income is expected to last is allowable as long as the customer wishes to rely on that income to qualify for the loan.

2. Barry is conducting a loan interview with a client, asks these two questions: 1) What country are you from? 2) How long will you receive alimony and child support? Which statement is true regarding the legality of the questions? A. Neither Question 1 or 2 are illegal B. Only question 1 is illegal C. Only question 2 is illegal D. Both questions are illegal

A 728B3ABC9B594252AF62245283375FE2 Not answered. The correct answer is a. B is incorrect because this is not blatant discrimination directly linked to a prohibited basis. C is incorrect because this policy is applied consistently to all applicants. D is incorrect because this practice has a potential disparate impact.

2. Mary is disabled and wants to purchase a town home and applies for a loan of $35,000. She is told the minimum amount for a real estate loan is $40,000. What type of discrimination is possible in this situation? A. Disparate impact B. Overt discrimination C. Disparate treatment D. This is not discriminatory

B 3E77801E9FB043D682FE19A9EF4BF03C Not answered. The correct answer is b. A is incorrect because all persons are to be treated fairly, regardless of sex. C is incorrect because all persons are to be treated fairly, regardless of age. D is incorrect because persons are to be treated fairly, regardless of color.

2. Which statement best describes the intent of fair lending? A. Provide women with fair and equal access to credit B. Provide all persons with fair and equal access to credit C. Provide senior citizens with fair and equal access to credit D. Provide people of color with fair and equal access to credit.

A A6234F80C8A74D57B7A859FFCE4B27CD Not answered. The correct answer is a. B is incorrect because this is not a primary purpose of HMDA. C is incorrect because the ADA prohibits discrimination against persons with disabilities. D is incorrect because the FHA prohibits discrimination by housing-related real estate professionals.

3. What is one of the primary purposes of HMDA? A. To provide the public with information that will help show whether financial institutions are serving the housing credit needs of the neighborhoods and communities in which they are located B. To prevent disparate treatment C. To identify unlawful discrimination against persons with disabilities D. To prohibit discrimination by housing-related real estate professionals such as appraisers and real estate agents

C 69011A170FB04ECC8B634FCC98B1EA55 Not answered. The correct answer is c. A and D are incorrect because the policy is an example of disparate impact. B is incorrect because even if business necessity is established, a violation may exist if it is demonstrated that the business consideration can be satisfied by a criterion that has a less severe impact on protected groups.

4. A bank decided that it would not approve any home loans in amounts under $100,000. This decision was found to disproportionately impact low to moderate income individuals who were predominately minorities, as they could not qualify for a home loan with the bank. Although applicants were not treated differently based on their race or ethnicity. This policy is an example of what practice? A. Disparate treatment B. Business necessity C. Disparate impact D. Overt discrimination

B E4EA40C333CF4AF0847298FBABDA9973 Not answered. The correct answer is b. A, C, and D are incorrect because you should treat all inquirers the same and not make any assumptions about them.

4. Amir is a new receptionist with Anytown Bank and wants to comply with fair lending laws. He has asked his manager for suggestions on best practices related to his job of greeting applicants, referring applicants to the appropriate lenders, and providing brochures and information that meets the inquirers' needs. Which answer provides the best practices that Amir should follow? A. Provide brochures only to inquirers that appear serious about the products. You do not want to waste resources if the inquirers are not interested or do not look like they could qualify for the products B. Greet each customer as soon as possible after he or she enters the lobby, inform all clients about the credit products in which they may be interested, and make appointments on a consistent basis for the inquirers to see credit officers C. If two inquirers enter the bank lobby, quickly assess which one appears to qualify for credit and wait on that person first D. Encourage wealthy-looking persons to make appointments with loan officers and discourage anyone that looks like they could not afford the payments from making appointments with loan officers

A 534B5C7B183F4DDF8F8B9846F209131B Not answered. The correct answer is a. B is incorrect because persons are to be treated fairly, regardless of sex. C is incorrect because persons are to be treated fairly, regardless of color. D is incorrect because persons are to be treated fairly, regardless of age.

4. Which option best describes the group that are targeted for fair and equal access to credit according to the five federal fair lending laws? A. All Persons B. Women C. People of color D. Senior citizens

B 8BF2528FA86D4900949D10C1955EA955 Not answered. The correct answer is b. A, C, and D are incorrect because requiring a credit score of 550 for all applicants is not an example of a discriminatory practice.

4. While conducting an audit of the bank's loan policy, the auditor discovered that it is the bank's policy to require a minimum credit score of 550 in order to qualify for a loan. This loan policy could result in what practice? A. Disparate treatment B. This is not a discriminatory practice C. Disparate Impact D. Overt Discrimination

A DD721D841CB94144AAB23E3067267062 Not answered. The correct answer is a. B, C, and D are incorrect because this is an example of disparate treatment which occurs when a lender bases its lending decision on one or more of the prohibited discriminatory factors covered by the fair lending laws.

5. A lender offers a credit card with a limit of $750 for applicants age 21 through 30 and $1,500 for applicants over age 30. This policy violates the ECOA's prohibition on discrimination based on age and is also an example of which practice? A. Disparate Treatment B. Overt Discrimination C. Disparate Impact D. Predatory Lending

A 60E8C2CBF906415EA41038E6B35131DD Not answered. The correct answer is a. B, C, and D are incorrect because you should treat all inquirers the same and not make any assumptions about them.

5. As a new receptionist at the bank, Yushiko needs to comply with fair lending laws and has asked her manager for some suggestions for best practices related to her job of greeting applicants, referring applicants to the appropriate lenders, and providing brochures and information that meets the inquirers' needs. Which answer provides the best practices that Yushiko should follow? A. Greet each customer as soon as possible after he or she enters the lobby, inform all clients about the credit products in which they may be interested, and make appointments on a consistent basis for the inquirers to see credit officers B. Provide brochures only to inquirers that appear serious about the products. You do not want to waste resources if the inquirers are not interested or do not look like they could qualify for the products C. If two inquirers enter the bank lobby, quickly assess which one appears to qualify for credit and wait on that person first D. Encourage wealthy-looking persons to make appointments with loan officers and discourage anyone that looks like they could not afford the payments from making appointments with loan officers

A 5569FE02B14A48B682F251F2EEBCD85C Not answered. The correct answer is a. B and C are incorrect because the Fair Housing Act is intended to prevent discrimination against all individuals and families seeking housing and home loans because of any prohibited factors, and ECOA is intended to prevent discrimination in lending based on certain prohibited factors. However, this new program will provide new credit options to individuals who may not have qualified under existing programs. In that respect, the program will support the purpose of the ECOA and FHA. D is incorrect because the program is not targeted to individuals with disabilities.

5. Your financial institution has developed a real estate loan program that meets the credit needs of low and moderate income individuals. The new program should help your financial institution comply with which law? A. Community Reinvestment Act B. Fair Housing Act C. Equal Credit Opportunity Act D. Americans with Disabilities Act

B 9772CE7A62F544DE9245129102959B7B Not answered. The correct answer is b. A is incorrect because this is not blatant discrimination directly linked to a prohibited basis. C is incorrect because this policy is applied consistently to all applicants. D is incorrect because this practice has a potential for disparate impact.

6. Eduardo has applied for a home equity loan of $26,000. However, he learns the lender has a real estate equity loan minimum of $50,000. What type of discrimination is possible in this situation? A. Overt discrimination B. Disparate impact C. Disparate treatment D. This is not discriminatory

A 6E524B8848DD4B0DBC8D1AA3989BEE17 Not answered. The correct answer is a. B is incorrect because you may consider whether the applicant is old enough to enter into a legally binding contract in your state or to provide preferable loan rates and terms. C is incorrect because this activity is prohibited by the FHA. D is incorrect because the ECOA only allows a bank to provide more preferable rates and terms to customers age 62 and older.

6. There are certain instances when taking a prohibited basis into consideration is allowed. One example of when you may consider a prohibited basis when evaluating a credit decision would be the age of the applicant. Which situation best describes when you can consider age when evaluating a credit request? A. You may consider age when determining whether the applicant is old enough to enter into a legally binding contract in your state B. You may never consider age when evaluating a credit request C. You may consider age in evaluating whether a female applicant will be starting a family soon and may quit her job and lose her income D. You may consider age when determining a preferable rate structure for a loan product for individuals age 55 and older

D 78FA17256C774F729333DCADB2B842CC Not answered. The correct answer is d. A is incorrect because HMDA is an information-reporting act and does not encourage any particular lending. B is incorrect because this is not an individual loan transaction. C is incorrect because the TILA does not address meeting the needs of low/mod income borrowers.

6. With which law does a loan program comply if it is specifically designed to meet the credit needs of low and moderate income individuals? A. Home Mortgage Disclosure Act B. Fair Housing Act C. Truth in Lending Act D. Community Reinvestment Act

A 01C2426090D34A0ABC7C5495796E9795 Not answered. The correct answer is a. B is incorrect because if public assistance income is a primary source of repayment, and without it, the client would not meet the debt-to-income ratio requirement, you may consider it when making the credit decision. C is incorrect because you may consider whether the applicant will continue to qualify for the income and the length of time public assistance income will be received, but you may not require information regarding the need for public assistance. D is incorrect because if the applicant qualifies for the loan without considering the public assistance income, the applicant is not required to provide that additional information.

7. An applicant tells you that he is on public assistance. Under what circumstance can the receipt of public assistance income be considered as a factor when making a credit decision? A. You may consider public assistance income if the income is a primary source of repayment, and without it, the client would not meet the debt-to-income ratio requirement B. There are no circumstances under which a lender may ask about an applicant's receipt of public assistance income C. You may consider income from public assistance but you must require documentation from the state as to why the public assistance is necessary D. If the applicant qualifies for the loan based on income other than public assistance income but tells you that he receives public assistance income, you are still required to document the amount of public assistance income received even if the applicant does not wish to provide it

D 534D94634D284C1BB6F5AAD562D9AACB Not answered. The correct answer is d. A is incorrect because persons are to be treated fairly, regardless of sex. B is incorrect because persons are to be treated fairly, regardless of age. C is incorrect because persons are to be treated fairly, regardless of color.

7. How should you best summarize the purpose of fair lending laws? A. To provide women with fair and equal access to credit B. To provide senior citizens with fair and equal access to credit C. To provide people of color with fair and equal access to credit D. To provide all persons with fair and equal access to credit

C CE97B2A247F949388FCFD9C0ECF562AE Not answered. The correct answer is c. A is incorrect because the teller discouraged the customer from submitting an application. B is incorrect because this situation goes beyond unfair treatment. To say that it is primarily unfair treatment ignores the illegal discrimination that is evident. D is incorrect because this is definitely an example of illegal discrimination as well as unfair treatment.

7. Jane Bender went to a local branch to make a deposit. While at the teller window, she noticed a sign advertising personal loans. ''I see you are advertising loans. I have never been approved for a loan before,'' she shared with the teller. ''I have been banking here for almost a year. Do you think this bank would approve my loan application?'' The teller replied, ''I have heard that this bank does not like to make loans to women. If I were you, I would not bother applying; you will just be turned down.'' The teller handed Jane her receipt and continued, ''Is there anything else I can help you with today?'' The teller's comments are primarily which type of discrimination? A. Acceptable treatment because the teller was being honest B. Unfair treatment C. Illegal discrimination D. Neither unfair treatment or illegal discrimination

C 44CE1F56CE01475C9D619009701BB7E3 Not answered. The correct answer is c. A is incorrect because you may consider whether the applicant is old enough to enter into a legally binding contract in your state or to provide preferable loan rates and terms. B is incorrect because this activity is prohibited by the FHA. D is incorrect because the ECOA only allows a bank to provide more preferable rates and terms to customers age 62 and older.

7. With few exceptions, a financial institution cannot inquire about any characteristic of the applicant that relates to a prohibited basis. One example of when you may consider a prohibited basis when evaluating a credit decision would be the age of the applicant. Which situation best describes when you can consider age when evaluating a credit request? A. You may never consider age when evaluating a credit request B. You may consider age in evaluating whether a female applicant will be starting a family soon and may quit her job and lose her income C. You may consider age when determining whether the applicant is old enough to enter into a legally binding contract in your state D. You may consider age when determining a preferable rate structure for a loan product for individuals age 55 and older

D FC896C56B47A431C81E8E05D50B32C96 Not answered. The correct answer is d. A, B, and C are incorrect because you should treat all inquirers the same and not make any assumptions about them.

8. As a new receptionist at the bank, Elena wants to comply with fair lending laws. She has asked her manager for suggestions on best practices related to her job of greeting applicants, referring applicants to the appropriate lenders, and providing brochures and information that meets the inquirers' needs. Which answer provides the best practices that Elena should follow? A. Provide brochures only to inquirers that appear serious about the products. You do not want to waste resources if the inquirers are not interested or do not look like they could qualify for the products B. If two inquirers enter the bank lobby, quickly assess which one appears to qualify for credit and wait on that person first C. Encourage wealthy-looking persons to make appointments with loan officers and discourage anyone that looks like they could not afford the payments from making appointments with loan officers D. Greet each customer as soon as possible after he or she enters the lobby, inform all clients about the credit products in which they may be interested, and make appointments on a consistent basis for the inquirers to see credit officers

B FE5C5B94C6714296921B3BAB71D0E1A2 Not answered. The correct answer is b. A is incorrect because this situation goes beyond unfair treatment. To say that it is primarily unfair treatment ignores the illegal discrimination that is evident. C is incorrect because this is definitely an example of illegal discrimination as well as unfair treatment. D is incorrect because the CSR could have been more helpful in responding to James' query.

8. James is African-American. He lives in a community that is predominately African-American. At his local bank, he asked to speak to a loan officer about a car loan. The customer service representative explained that the loan officer was out to lunch and told him to come back later. James asked when would be a good time to return and the CSR replied, ''I am really not sure.'' Just as James was ready to leave, Phil, a well-dressed white man came in and asked about a loan. The CSR explained that the loan officer was out, but she expected him back in about 30 minutes. She offered to make an appointment for Phil, and to call him when the loan officer arrived. What example does the CSRs actions primarily represent? A. Unfair treatment B. Illegal discrimination C. Neither unfair treatment or illegal discrimination D. Acceptable treatment since no one was available

B A27DE0F19A4F455EA3AA8D44ABFAEA2A Not answered. The correct answer is b. A is incorrect because this situation goes beyond unfair treatment. To say that it is primarily unfair treatment ignores the illegal discrimination that is evident. C is incorrect because this is definitely an example of illegal discrimination as well as unfair treatment. D is incorrect because the CSR could have been more helpful in responding to Kim's query.

8. Kim Oh is Korean and English is his second language. He lives in a community that is predominately Korean-speaking. He went into his local bank to inquire about a personal loan. When he asked to speak to a loan officer, the client service representative told him that because he could not speak English very well, no one could help him, and he should go to a bank that served ''his kind'' of people. The CSRs actions are primarily which type of discrimination? A. Unfair treatment B. Illegal discrimination C. Neither unfair treatment or illegal discrimination D. Acceptable treatment since no one was available

B 006F56E963864AC88FC364EC116A0335 Not answered. The correct answer is b. A is incorrect because this is not a primary purpose of HMDA. C is incorrect because the ADA prohibits discrimination against persons with disabilities. D is incorrect because the FHA prohibits discrimination by housing-related real estate professionals.

8. What is one of the primary purposes of HMDA? A. To prevent disparate treatment B. To help public officials target public investments from the private sector to areas where they are needed C. To identify unlawful discrimination against persons with disabilities D. To prohibit discrimination by housing-related real estate professionals such as appraisers and real estate agents

B 8BED5219C2AF4B7B805CDCD1E69D37BB Not answered. The correct answer is b. A is incorrect because the program is not targeted to individuals with disabilities. C is incorrect because the TILA does not address meeting the needs of low/mod income borrowers. D is incorrect because this is not an individual loan transaction and CRA was the best answer.

9. In a staff meeting, your manager announced a new bank loan program that will provide new credit options to individuals who may not have qualified under existing programs. Specifically, it will meet the needs of low and moderate income customers who are seeking credit. With which law will this program comply? A. Americans with Disabilities Act B. Community Reinvestment Act C. Truth in Lending Act D. Fair Housing Act