FCRA/FACTA (Fair Credit Reporting Act) (Fair and Accurate Credit Transactions Act)

T/F: The FCRA allows a consumer reporting agency to furnish a consumer report to a person which it has reasons to believe in response to a request by the head of a state or local child support enforcement agency if the person certifies various information to the consumer reporting agency regarding the need to obtain the report?

True

Suspicious activity, potential pattern or practice or a danger to a borrower's credit information being used for identity theft is the definition of a?

Red Flag

The Fair Credit Reporting Act (FRCA) became effective on?

April 25, 1971

Not considered to be a covered account according to FACTA? A) Corporate Checking Account B) Personal Checking Account C) Utility Bill D) Telephone Bill

A

The determination of whether your business or organization is covered by the Red Flags Rule isn't based on your industry or sector, but rather on whether your?

Activities fall within the relevant definitons

A company is required to have a written Red Flags plan? A) Only if the company is working primarily online B) Always unless you're a small organization C) Always D) Never

C

T/F: Borrowers can dispute accurate credit info?

False

T/F: MLO's do have to explain the information that the mortgage loan originator gets from the CRA regarding the credit score?

False

When, based on the information in a consumer report, the material terms of a credit extension being extended to a borrower are materially less favorable than the most favorable terms available to a large portion of consumers, the MLO must give a?

Risk-Based Pricing Notice (RBP)

T/F: FACTA amended the FCRA?

True

T/F: MLO's don't have to disclose any credit score or other information after the loan has closed?

True

T/F: MLO's don't have to disclose any information besides the credit score and key factors?

True

Website for opt out of prescreened offers is?

www.optoutprescreen.com

Under the red flags rule, covered entities must establish and administer an identity theft prevention program that meets four general requirements?

1. Identify relevant red flags (Suspicious patterns or practices) 2. Establish procedure to detect red flags 3. Prevent and mitigate identity theft (Actions taken when a red flag is detected) 4. Update your program routinely (How you will respond to new risks)

The FCRA allows a consumer reporting agency to furnish a consumer report in response to?

A court order or Federal Grand Jury subpoena

It's important to fight the battle against identity theft by? A) Implementing data security practices that make it harder for crooks to get access to the personal information they use to open or access accounts B) Paying attention to the red flags that suggest fraud may be afoot C) Both A & B

C

FCRA has significant responsibilities for?

Consumer Reporting Agencies (CRA's) and lesser for those who are not

MLO can not be held liable for any of the information provided or omitted from the disclosures provided by the?

Consumer Reporting Agencies (CRA)

MLO is only responsible for providing the consumer with the copy of the credit score information received from the?

Consumer Reporting Agencies (CRA)

Fair and Accurate Credit Transactions Act purpose is to "update and amend" the FCRA. Meaning?

Curb identity theft, improve customer dispute resolution, improve accuracy of consumer records, make improvements in the use of, and consumer access to, credit information, and to allow consumers to exercise greater control regarding the type and amount of solicitations they receive

Any other account that a financial institution or creditor offers or maintains for which there is a reasonably foreseeable risk to customers or to the safety and soundness of the financial institution or creditor from identity theft is covered under the Red Flags Rule. These include?

Financial risks, operational risks, compliance risks, reputation risks, litigation risks

The notice to opt-out must be clear and concise and offer the consumer the opportunity to?

Prohibit all solicitations, as well as the types of entities and information covered and which delivery modes the consumer wants to prohibit

Negative information - A borrower must be notified within 30 days of a creditor placing negative information on their credit file. This allows the consumer?

The ability to dispute the information in a more timely manner. Lenders must resolve disputes within 30 days

The Risk-Based Pricing Notice (RBP) must contain?

The terms of credit based on a consumer report, the identity of the CRA providing the consumer report, a statement informing the borrower that he may obtain a copy of the consumer report from the CRA for free, the contact information for the CRA for obtaining said report.

T/F: The FCRA allows a consumer reporting agency to furnish a consumer report to a person which it has reasons to believe intends to use the information for employment purposes?

True

T/F: The FCRA allows a consumer reporting agency to furnish a consumer report to a person which it has reasons to believe intends to use the information in connection with a determination of the consumer's eligibility for a license or other benefit granted by a governmental instrumentality that is required by law to consider an applicant's financial responsibility?

True

T/F: The FCRA allows a consumer reporting agency to furnish a consumer report to a person which it has reasons to believe intends to use the information in connection with the underwriting of insurance involving the consumer?

True

T/F: The FCRA allows a consumer reporting agency to furnish a consumer report to a person which it has reasons to believe intends to use the information, as a potential investor or servicer, or current insurer, in connection with a valuation of, or an assessment of the credit or prepayment risks associated with, an existing credit obligation?

True

T/F: The FCRA allows a consumer reporting agency to furnish a consumer report to a person which it has reasons to believe intends to use the report in connection with a credit transaction involving the consumer (includes extending, reviewing, and collecting credit)

True

T/F: The FCRA allows a consumer reporting agency to furnish a consumer report to a person which it has reasons to believe otherwise has a legitimate business need for the information in connection with a business transaction that is initiated by the consumer?

True

T/F: The FCRA allows a consumer reporting agency to furnish a consumer report to a person which it has reasons to believe to review an account to determine whether the consumer continues to meet the terms of the account?

True

T/F: The opt-out rule does not apply to a MLO whose compliance with this section would prevent that MLO from complying with any provision of state insurance laws pertaining to unfair discrimination in the state in which the mortgage loan originator is doing business lawfully?

True

T/F: The opt-out rule does not apply to a MLO performing services on behalf of an affiliate?

True. However, this exception will not apply if the affiliate would not be allowed by law to solicit the consumer?

The Red Flags Rule applies to "financial institutions" and Creditors." The Rule requires you to conduct a periodic risk assessment if you have?

"Covered accounts." You need to implement a written program only if you have covered accounts

Fair and Accurate Credit Transactions Act (FACTA)

Amended FCRA

T/F: The Federal Trade Commission (FTC) created, maintains and monitors compliance with the Red Flags Rule?

True

Businesses and organizations that regularly defer payments for goods/services or provides goods/services and bill customers later is the FTC's definition of?

A creditor. Also defined as one who regularly grants loans, arranges for loans or the extension of credit, or makes credit decisions

State or national bank, a state or federal savings and loan association, a mutual savings bank, a state or federal credit union, or any other person that, directly or indirectly, directly or indirectly, holds a transaction account belonging to a consumer. This is the FTC's definition of?

A financial institution

Covered under the Red Flags Rule as a consumer account you offer your customers that is primarily fo personal, family or household purposed that involve or is designed to permit multiple payments or transactions include?

Credit card accounts, mortgage loans, automobile loans, margin accounts, cell phone accounts, utility accounts, checking accounts and saving accounts

If you're a creditor or financial institution with covered accounts, you must develop and implement a written identity theft prevention program that must be designed to prevent, detect, and mitigate identity theft in connection with the?

Opening of new accounts and the operation of existing ones

FCRA requires creditors to provide accurate credit information to the CRA's. The CRA's have ultimate responsibility for?

Protecting a borrower's credit information

T/F: The opt-out rule does not apply to a MLO that has an existing business relationship with the consumer to whom it is marketing?

True

FCRA requires any prospective "user" of a credit report to have a?

Legally permissible purpose to obtain a report

Fair Credit Reporting Act (FCRA)

Regulation V

The FCRA corresponds with what regulation?

Regulation V

Consumers can opt out of getting offers for up to 5 years. When the opt out period ends the consumer must be given?

A chance to extend the period for another 5 years

The Red Flag Rule expanded the definition of "creditor" to not just include financial institutions but anyone who offers?

A service that is paid for later

Every company is required to have a written Red Flags Plan in place and each company plan will vary depending on the?

Size/scope/complexity of the organization

T/F: MLO's do have to provide more than one disclosure per loan transaction?

False

T/F: MLO's must provide the disclosure required another person has already supplied the consumer with a disclosure for that loan transaction?

False

T/F: The opt-out notice cannot be included with any other notices required to be given to the consumer by law?

False

T/F: The opt-out rule does apply to a MLO that has a relationship with a consumer through the consumer's current employer or through the employer-sponsored benefit plan?

False

T/F: The opt-out rule does apply to a MLO that is responding to a communication initiated by the consumer?

False

Prescreened credit offers are allowed under FCRA. Lenders have to request specific criteria from the CRA's and then?

Offer a pre-approved credit offer based on those standards, unless the consumers have elected to opt out of being included on prescreened lists

The FCRA allows a consumer reporting agency to furnish a consumer report in accordance with?

The written instructions of the consumer

T/F: The opt-out rule does not apply to a MLO that is responding to solicitations authorized or requested by the consumer?

True

Credit score disclosure - We are required under FACTA to disclose to our clients upfront in the application process?

What the range of available scores are, what there score was, the factors that adversely affected their score, date the credit score was created, as well as the company who provided the score