FCRA Reg V

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A lender is not required to give a risk based pricing notice to a consumer to whom it provides an adverse action notice

True

Banks may do limited postscreening with regard to eligibility after a person on the list responds to the offer

True

Which three options are bank responsibilities when using consumer reports in credit or employment decisions? A) Identify the company that provided the consumer report so the consumer may verify report accuracy B) Have a permissible purpose for obtaining a consumer report C) Provide a notice of rights to obtain the reasons for a credit score D) Notify the consumer when the bank takes an adverse action based on a consumer report

A, B, & D

Which three options include written information that the FCRA requires in an adverse action notice that includes a credit score? A) The date on which the credit score was created B) The consumer's credit score C) Up to eight key factors that adversely affected the credit score D) The name of the consumer reporting agency that provided the credit score

A, B, & D

Banks typically consider a loan applicant's credit score when making a credit decision. Which option best describes a credit score? A. the loan to value ratio on a mortgage loan B. the down payment amount compared to the collateral value C. the consumer's financial assets that are computed based on statistical modeling D. a numerical value that predicts the likelihood of certain credit behaviors, including default

Is marketing a permissible purpose under the FCRA?

No risk based pricing notice if required if the extension of credit is secured by a 1-4 family residence

True

Star Bank has decided that based on its business model, providing the credit score notice makes more sense than providing the risk-based pricing notice. What must Star Bank do to ensure that it complies with the credit score notice requirements? A) It must provide a notice to all consumers whose credit price or term was based on a credit score B) It must provide a notice to any consumers who received materially less favorable terms C) It must provide a notice for account review purposes at the end of every year D) It must provide a notice orally to make sure the consumer is able to ask questions related to the terms

Which method for consumer report information disposal would satisfy Fair Credit Reporting Act (FCRA) requirements? A. Burn, pulverize, or shred papers containing the consumer report information B. Back up electronic information onto a separate drive and store it in a locked cabinet C. Place consumer report information in a locked container in a designated room D. Throw the consumer information in the trash can behind the teller line

How long are active duty alerts active?

At least one year

How long are initial fraud alerts active?

At least one year

Most banks provide the credit score notice rather than the risk-based pricing notice. Who must receive the credit score notice? A. All consumers, even if the bank did not price based on risk B. All consumers who receive a risk-based pricing notice C. All consumers who do not have a credit score D. All consumers whose credit price or term was based on a consumer report

Which of the following methods is NOT valid for determining which consumer borrowers should receive a risk-based pricing notice? A. the credit score proxy method B. the direct comparison method C. the tiered pricing method D. the comparative file method

When is a FCRA adverse action notice required?

If a consumer report influences the adverse decision

What is the purpose of a security freeze?

Prohibits a CRA from disclosing the contents of the consumer report to any person

Name the six permissible purposes a Consumer Reporting Agency may furnish a consumer report.

1. Authorized in writing by the consumer 2. Response to a court order 3. Connection with a credit or insurance transaction 4. Employment purposes 5. Legitimate business need 6. Financial institution (prescreen)

Beyond the credit score notice exception, there are other exceptions to the requirement to provide the risk-based pricing notice. Which item correctly identifies one of those exceptions? A. Unavailable credit score B. Material loan terms materially less favorable C. The lender provides the §609(g) notice D. The lender prices all products based on risk

First National Insurance Company has denied an application for insurance for Ed because of info contained in his consumer report. Which statement best describe First National Insurance's responsibility under the FCRA? A. Provide the FCRA adverse action notice B. Provide the FCRA adverse action notice along with a copy of the consumer report and consumer's rights C. Provide only a copy of the consumer report in advance of the actual denial so that he may dispute it if is incorrect D. Provide a copy of the consumer report and consumer's rights in advance of the actual denial so that he may dispute the report if it is incorrect

Hillard applied to FNB for a car loan. The bank requested a credit report on Hillard from the local credit reporting agency and found that he had almost no credit. No negative items were on the report. In addition, Hillard had been employed at his job for 4 months and his previous work experience was difficult to verify. The bank denied his application for a loan and send him an adverse action notice. What should the bank do under the FCRA? A. Notify Hillard that a credit report was obtained and give him the name and address of the credit bureau B. Nothing. The bank has no responsibilities under the FCRA because the credit report contained no adverse items C. In person or over the telephone, explain to Hillard that, although the credit report had no negative items, he has too little credit history D. Give Hillard a copy of the credit report

A risk-based pricing notice is required if the creditor uses a credit report (or credit score) to determine a material term. What is a ''material term''? A. The loan teaser rate B. The annual percentage rate (APR) C. The account signers D. The loan penalty rate

Assuming a bank prices based on risk, which loan applicant would receive a risk-based pricing notice? A. Pat, whose loan has a teaser rate of 0 percent for 3 months, which is based on the standard prime plus 3 percent offered to all consumers who have this product B. Donna, whose credit score is low and is offered a loan at a higher annual percentage rate (APR) than a consumer with better credit ratings C. Don, to whom the bank offers the same APR as any other applicant but is required to obtain a co-signer for his loan D. Tina, who the bank offers the same APR as any other applicant but will be charged a penalty rate if her payments are more than 45 days' past due

Consumer reports used for credit transactions may contain which of the following items? A. Records of bankruptcies for 7 years B. Adverse credit items for 7 years and bankruptcies for 10 years C. Records of arrests or convictions for 10 years D. Paid tax liens for 10 years

If the bank charges the same rates to all approved applicants for a particular product, does the bank need to provide risk-based notices? A. Yes, if a bank relies on a consumer report, a risk-based pricing notice is required B. No, but an adverse action notice is still required for denied applicants C. Yes, because consumers need to know how the bank used their score D. No, but a credit score notice is required

The FCRA has certain requirements when an employer such as a bank uses a consumer report in determining whether an applicant should be hired. Which statement is true? A. The employer does not need to provide an ECOA adverse action notice if it denies the employment application since no denial of credit is involved B. The employer must orally disclose to the applicant that a consumer report may be used C. The employer does not require the applicant's written authorization to obtain a consumer report D. The employer needs only to provide a copy of the consumer report to the applicant before taking adverse action

E-Bank prices its unsecured loans based on risk but not its auto loans. For auto loans, it uses consumer reports and scores, but the rates are fixed based on whether the car is new or used. Do auto loan applicants have to receive risk-based pricing notices? A. Yes, if a bank relies on a consumer report, a risk-based pricing notice is required B. Yes, because consumers need to know how the bank used their score C. No, but an adverse action notice is still required for denied applicants D. No, but a credit score notice is required

FNB denied a credit application from Mr. Johnson because the application scored too low on the bank's internal credit scoring system. Mr. Johnson's credit report, received from a credit reporting agency, scored a 4 out of a possible 10. Other part's of Mr. Johnson's application received low scores also. Which statement best describes FNB's responsibility under the FCRA? A. Send an adverse action notice that states the reasons the credit was denied B. Send a notice that a credit report was used C. Send an adverse action notice that states that a credit report was used and gives the name and address of the credit reporting agency D. Send an adverse action notice that summaries the info on the credit report

One regulation, which implements certain FCRA provisions, requires that the marketing related opt-out notice clearly and conspicuously disclose that the information may be used by an affiliate for marketing purposes, and give the consumer a simple method and reasonable time to opt out of such use. What regulation addresses this topic? A. Regulation Z B. Regulation P C. Regulation V D. Regulation B

When a bank declines a loan application based on a credit report obtained from a consumer reporting agency, what is its responsibility under the FCRA? A. The bank has no responsibilities under the FCRA in this situation B. Notify the applicant of the adverse action stating only the necessary info that a credit report was received and the bank's denial was based on it C. Notify the applicant of the adverse action, explaining it was based on a consumer report, as well as other required info D. Notify the applicant of the adverse action and provide a copy of the credit report so that the applicant can determine why the credit was declined

When must a bank provide a risk-based pricing notice in a closed-end credit transaction? A. 3 days after the right of rescission expires but not before customers move into their home B. Before the first transaction is made but not earlier than the time the approval decision is communicated to the consumer C. Before consummation of the transaction but not earlier than the time the approval decision is communicated to the consumer D. The earlier of either the time of the first mailing after approval or within 30 days after approval

Lila, a new lender at the bank, is taking compliance training. What would Lila have learned about risk-based pricing notices in her Fair Credit Reporting Act (FCRA) training? A. Risk-based pricing notices must be provided to business customers B. Risk-based pricing notices must be provided if after conducting a periodic review of a consumer's credit, a lender decreases a customer's annual percentage rate (APR) based on information in a consumer report C. A risk-based pricing notice must be provided even when the lender approves the loan on terms the consumer requested D. A lender must provide a risk-based pricing notice when based on the consumer's credit report, the creditor provides credit to the consumer on materially less favorable terms than it provides to other consumers

Mary applied for a loan at FNB. The bank received a report from one of its affiliated banks, which shows a negative payment history within that bank. The bank used this info in part to deny Mary's request for a loan. Although the ECOA adverse action notice is required, based on the FCRA requirements, which statement is true? A. The FCRA adverse action notice is required because the info is from an affiliate, not a third party B. The FCRA adverse action notice is required even if the affiliate's info is limited to its own experience and transaction with the consumer C. The FCRA adverse action notice is always required because the info is from an affiliate, a third party D. The FCRA adverse action notice is not required when the affiliate's info is limited to its own experience and transactions with the consumer

Robin just purchased a mattress at Sleep Is Us Mattress Warehouse and applied for instant credit. Assuming the bank priced Robin's loan based on risk, when should Robin receive her risk-based pricing notice? A. 3 days after the right of rescission expires but not before the customer gets her new mattress delivered B. Before the first transaction is made but not earlier than the time the approval decision is communicated to the consumer C. Before consummation of the transaction but not earlier than the time the approval decision is communicated to the consumer D. The earlier of either the time of the first mailing after approval or within 30 days after approval

Which loan application falls into the Fair Credit Reporting Act (FCRA) exception and does not require a creditor to send a risk-based notice or a credit score notice? A. An application for overdraft protection line of credit from Jimmy, who has no credit score B. An application for a new car loan for Martie whose annual percentage rate (APR) will be higher based on a low credit score C. An application for a 30-year mortgage from Lester, who received the §609(g) notice D. An application for Dan, who will receive the rate he requested

Which statement is true about credit score disclosures? A. Credit score info must be sent to the person who is the subject of the credit score with copies to any co-applicants B. Credit score info must be sent to the person who is the subject of the credit score with copies to any guarantors or co-signers C. Credit score info must only be sent to the person who is the subject of the credit score and with a copy to the credit bureau that provided the score D. Credit score info must only be sent to the person who is the subject of the credit score

True or False: Guarantors and co-signers must also receive adverse action notices

False

True or False: Information shared with affiliates, regardless of the information type, can be used for marketing purposes without providing the consumer with an opt-out notice.

False

If a third party requests a consumer report for a consumer with a security freeze and the consumer does not allow the report to be accessed, the third party may treat the application as ___

Incomplete

A risk based pricing notice must be provided to the customer when a lender uses a consumer report in the review of an existing account and ___the APR on the account

Increases

Are banks required to obtain written authorization to obtain a consumer report when the applicant applies for a credit extension?

Is a FCRA notice required for adverse action based on information from an affiliate?

No as long as the information is limited to only the affiliate's experience and transaction with the consumer.

What does a cutoff score under the credit score proxy method represent?

The score representing the point of which 40% of the lenders' borrowers have higher scores and 60% have lower scores. Used to determine which borrowers must receive a risk-based pricing notice

How long must a bank maintain the product criteria list used on file?

Three years from the date the bank made the offer

Under the ___method, lenders that set the material terms of credit by placing consumers within discrete pricing tiers based on the consumer's credit report, must provide a risk- based pricing notice to all consumers who are not in the top tiers.

Tiered pricing method

A bank may obtain routine consumer reports for loan review for an open-end line of credit but not for a closed-end loan.

True

The credit score disclosure exception is not available for account review purposes.

True

Are banks able to obtain a consumer report when the applicant inquires about credit but has not submitted an application?

Yes

Does the FCRA allow using a credit report for more than one permissible purpose?

Yes

In which of the following circumstances is it NOT permissible for a financial institution to obtain a consumer report from a consumer reporting agency? a. The bank requests reports on all delinquent borrowers for collection purposes b. the bank requests prescreen lists on a prospective credit card applicants to solicit credit card accounts c. as an employee service, the bank requests credit reports on employees' family members for the employees' and their families' own use d. the bank obtains a credit report on prospective employees, with their consent, after the first interview but before the job offer

Consumer are excluded from prescreened lists for five years if they have ____ credit alert.

extended

A Credit Reporting Agency may report negative information for no longer than ____ years and bankruptcies for no longer than ____ years.

7, 10

Define a consumer report under FCRA

Any written or oral communication bearing on a consumer's individual creditworthiness or general reputation that is collected to establish the consumer's eligibility for credit or insurance, employment, or other authorized purposes

Define a 'Consumer Reporting Agency' under FCRA

Anyone who regularly engages in assembling or evaluating consumer credit or other information to furnish consumer reports to third parties

When a consumer's opt-out from an affiliate's solicitation expires, who must provide a renewal notice and opportunity to opt out for an additional period of five years? A. The bank holding company B. The Consumer Reporting Agency C. The affiliate providing the initial opt-out notice, or its successor D. The consumer's personal banker

A bank declined a credit applicant due to info on the applicant's credit report provided by a consumer reporting agency. Specifically, there was no adverse credit info in the report, but the applicant has a low credit score due to insufficient credit history and length of verifiable employment. Which statement best describes the bank's responsibility under the FCRA? A. The bank has no responsibilities under the FCRA because the credit report had no adverse credit info on it B. Notify the applicant of the adverse action stating only the necessary info that a credit report was received, and although it contained no negative reports, there was too little credit and employment history C. Notify the applicant of the adverse action and provide a copy of the credit report so that the applicant can determine why the credit was declined D. Notify the applicant of the adverse action, explaining it was based on a consumer report and provide the credit score and reasons for that score, as well as other required info

Congress created consumer protections because the information that furnishers provide to consumer reporting agencies can have significant consequences for consumers. What type of information is protected? A. Undecided information B. Fraudulent information C. Marginalized information D. Furnished information

When might a Financial Institution not be required to send out an annual privacy notice?

If the privacy practices are unchanged and the Financial Institution does not share information with non-affiliates

True or False: A FCRA notice is not required if information obtained from a third party is not related to the applicant's creditworthiness, standing, capacity, character, etc

True

True or False: An employer must comply with the FCRA adverse action notice requirements when denying an employment application based on information in a consumer report. However, the employer would not have to provide an Equal Credit Opportunity Act adverse action notice because the application does not involve credit.

True

True or False: Information related to transactions and experiences between the consumer and a financial institution may be shared with affiliates and others without notice of opt-out

True

True or False: The FCRA prohibits a financial institution from using consumer information obtained from an affiliate for marketing purposes unless the financial institution advises the consumer of its intent to use the consumer's information for such purposes and gives the consumer the right to opt out

True

True or False: Placement of a security freeze is limited to NCRAs and does not apply to a person, entity, affiliates, or collection agencies

True

True or False? When deciding whether to grant a business loan, a bank may pull a subject's credit report when the subject of the report will be personally liable for loan repayment

True

True or false A FCRA notice must be provided to each applicant whose consumer report was used

True

Active duty alert requesters are excluded from prescreened lists for ___ years.

Two

Which of the following communication is NOT a consumer report regulated by the FCRA? a. A report telephoned by a Bank A loan officer to a Bank B loan officer, describing Bank A's lending experience with a borrower b. a report from a credit bureau to a bank containing general credit information on a consumer c. a bank's written credit reference sent to a department store as requested by the individual with bank credit file information, including other lender's information from a credit bureau d. a bank's report to a contractor with credit information on a mutual customer, including references from retailers gathered by the bank at the customer's request

How long is an opt-out effective?

5 years

A consumer's marketing opt-out has a set duration. How long is the opt-out duration? A. Five years B. Until revoked by the bank C. One year D. Optional, depending on bank policy

Affiliates can share some information without providing the consumer with the ability to opt out. What information type can they share without a consumer opt-out? A. Transaction and experience information B. Information from applications C. Information from consumer reporting agencies D. Information to be used for marketing purposes

FNB has denied a credit application from Tina based in part on info in a consumer report. The bank is required to provide Tina with an adverse action notice under the FCRA. Which of the following must be included in Tina's adverse action notice? A. The name, address, and telephone number of the consumer reporting agency that provided the report B. A statement advising Tina to try applying for credit with FNB in another year C. A notice that Tina has the right to obtain a free copy of the consumer report within 30 days D. A statement that the consumer reporting agency made the credit decision

Furnishers that regularly provide information to consumer reporting agencies must notify the agencies when a consumer voluntarily closes a credit account. Why would this be a concern? A. It could lead other creditors to believe that the account was closed because the consumer failed to meet its terms B. Consumer reporting agencies do not like it when consumers close accounts for no apparent reason C. Creditors do not like to be charged for credit reports that show a lot of accounts closed by the consumer D. Accounts closed voluntarily usually means that consumers cannot meet their obligations

Mary Jo received two requests from her bank's affiliated insurance agency for information related to her bank's customers. The first request (request 1) was for loan transaction information for customers who applied with the insurance affiliate for auto insurance. The second request (request 2) was for a list of all the bank's customers with auto loans so that the affiliate could market auto insurance to them. Which statement is true regarding these two requests? A. Only request 1 is permissible according to Fair Credit Reporting Act provisions B. Only request 2 is permissible according to Fair Credit Reporting Act provisions C. Neither request is permissible according to Fair Credit Reporting Act provisions D. Both requests are permissible according to Fair Credit Reporting Act provisions

New loan officers at Parkside Bank are required to take Fair Credit Reporting Act (FCRA) training that includes information on consumer report user responsibilities. Which statement represents a fundamental Fair Credit Reporting Act (FCRA) requirement that would be part of the training? A. Anyone using a consumer report for employment purposes must take extra steps such as getting written permission to obtain a report B. Credit transactions, account reviews, marketing, and business needs are permissible purposes for obtaining consumer reports C. The bank must provide a consumer with his or her credit score if it was part of the decision, but not the reasons for the score D. The consumer does not need to be informed regarding the company identity that provided the consumer report

Pralent Bank has established a minimum credit score of 750 as part of its prescreened offer of credit. One consumer on the list provided by the consumer reporting agency had a 780 score at the time the list was developed. After they submitted an application, the bank pulled a full credit report that showed their credit score had dropped to 650. What is the bank required to do in this situation? A. The bank is not required to grant credit B. The bank must make a firm offer of credit C. The bank may only deny the loan if the customer fails to meet all criteria D. The bank must offer another product

The FCRA governs the collection, assembly, and use of consumer report information. Which statement best describes one of the reasons why Congress enacted the FCRA? A. Promote the efficiency of the nation's banking and consumer credit systems B. Ensure that only the most credit worthy applicants receive credit C. Promote a bank's ability to share consumer reports with non-affiliate third parties D. Provide a repository for sensitive information that criminals can hack

The FCRA has certain requirements when an employer such as a bank uses a consumer report in determining whether an applicant should be hired. Which statement is true? A. The employer does not need to provide an ECOA adverse action notice if it denies the employment application since no denial of credit is involved B. The employer must orally disclose to the applicant that a consumer report may be used C. The employer does not require the applicant's written authorization to obtain a consume report D. The employer needs only to provide a copy of the consumer report to the applicant before taking adverse action

The Fair Credit Reporting Agency (FCRA) requires furnishers to establish and implement reasonable written policies and procedures regarding information submitted to consumer reporting agencies. What must furnishers address in these procedures? A. Accuracy and integrity of the consumer information furnished to consumer reporting agencies B. Copies of credit reports furnished by consumer reporting agencies C. Credit freezes that the consumer can place with consumer reporting agencies D. Ability of the consumer to dispute reporting with the consumer reporting agency

Which statement is true regarding the FCRA not the ECOA when a bank takes adverse action in whole or in part based on affiliate info? A. The FCRA adverse action notice is not required when the affiliate's info is limited to its own experience and transactions with the consumer B. The FCRA adverse action notice is required because the info is from an affiliate, not a third party C. The FCRA adverse action notice is required even if the affiliate's info is limited to its own experience and transactions with the consumer D. The FCRA adverse action notice is always required because the info is from an affiliate, a third party

ACME Bank is considering an individual for a senior bank position and wishes to obtain: A. a credit report B. an investigative consumer report C. A credit score report D. a business purpose report

Busy Bank extends credit and regularly furnishes customer information to a nationwide consumer reporting agency. What must Busy Bank provide its customers if it furnishes negative information to the consumer reporting agency? A. An adverse action notice in accordance with Regulation B B. A notice that it furnished or will furnish negative information to the consumer reporting agency C. A notice that each consumer may dispute information provided D. A risk-based pricing notice

FNB asked applicant William to get a co-signer due to William's derogatory credit report and low credit score. However, even after evaluating the co-signer, the bank decided to decline the loan. To whom must the lender send the FCRA adverse action notice and credit score info? A. To William and his co-signer B. To William only C. To William with a copy to the credit bureau that provided the score D. To William and his co-signer, but his co-signer should only get William's credit score info

If a bank wants customers to file direct disputes at a specific address, what must it do? A. Inform the consumer, verbally, of where to send the dispute when the consumer calls to complain B. Designate a specific address for submitting disputes, either on the report or on a written notice to the consumer C. Post a notice in the branch next to the teller line and at each customer service representative's desk D. Include it as part of the bank's annual privacy notice

It is a bank's duty to protect consumers who have been victims of identity theft. Which example of a bank's policies and procedures protect victims of identity theft from inaccurate consumer reports? A. A bank may sell, transfer, or place a debt for collection debts the consumer reporting agency has identified as related to identity theft B. A bank that finds it furnished inaccurate information due to identity theft must promptly notify each consumer reporting agency of the inaccuracy and provide correct information C. A bank may continue to furnish information related to the identity theft to the consumer reporting agency indefinitely if consumers notify the bank that they are victims of identity theft D. A bank must have procedures to continue the re-reporting of information that the consumer reporting agency has informed the bank is related to identity theft

Karl wants to purchase a new truck, but his bank denied his application for credit based on derogatory info in his consumer report and his low credit score. Which statement describes what his bank must do under the FCRA? A. Send an adverse action notice that only states the reasons the credit was declined and an 800 number to contact the consumer reporting agency B. Send an adverse action notice stating the denial, the credit score and reasons for the score, the name, address, and phone number of the consumer reporting agency, and other info C. Send an adverse action notice that explains only that a credit report was used D. Send an adverse action notice that gives only the credit score and the reasons for the score

Marathon Bank & Trust requested consumer reports from a consumer reporting agency for two reasons: (1) The institution is developing a solicitation for home equity lines of credit and requests information based on established criteria that will result in firm offers of credit, and (2) the institution wants consumer reports on all bank customers for marketing purposes. Under the Fair Credit Reporting Act (FCRA) provisions, which statement is true regarding these reasons? A. Neither reason is permissible for obtaining the consumer reports B. Only reason 1 is permissible for obtaining the consumer reports C. Only reason 2 is permissible for obtaining the consumer reports D. Both reasons are permissible for obtaining the consumer reports

Once a financial institution receives a prescreened list, it must make a Fair Credit Reporting Act (FCRA) defined ''firm offer" of credit or insurance to each person on the list. "Firm offer of credit" means the financial institution will offer credit or insurance under which condition? A. The consumer has declared bankruptcy since the bank obtained the original prescreened list from the consumer reporting agency B. The consumer continues to meet the pre-established criteria based on information from a consumer report C. The consumer no longer meets the pre-established criteria bearing on credit worthiness or insurability based on information in the application D. The consumer no longer has any required collateral, as established before compilation of the list and disclosed in the offer

Susan Karpinski is the CEO of a local gym called Workouts R Us, Inc. She has requested a commercial loan from the bank to purchase new equipment and to install a lap pool at the gym. Susan will not be personally liable on the loan, but the loan officer still wants to obtain Susan's consumer report. Which action does the Fair Credit Reporting Act (FCRA) allow? A. The bank can obtain the report for safety and soundness purposes B. The bank can request Susan's written authorization to obtain the report C. The bank can request that Susan provide a copy of a prior credit report to the bank D. The bank can obtain the report since the company is borrowing money from the bank

The Fair Credit Reporting Act (FCRA) and the bank's contract with its consumer reporting agency prohibit re-use of consumer reports. Other than the fact that this is prohibited, which option correctly identifies one reason why re-using a consumer report is a risk for the bank? A. The consumer may not have authorized the re-use B. The consumer might have placed an alert after the bank obtained the original report C. The score information will be current D. The consumer may not have paid for re-use of the score for a second loan

The Fair Credit Reporting Act (FCRA) contains a process by which financial institutions, such as banks, obtain a list of consumers from a consumer reporting agency who meet the institution's pre-established criteria. What is the name of this process? A. Preapproval B. Prescreening C. Preferential treatment D. Permissible purpose

Two conditions must be met before communicating "other" information among affiliates. One is that it must be clearly and conspicuously disclosed to the consumer that the information will be communicated among such entities. What is the second condition? A. Before the information is communicated, the bank must inform the consumer that no opt-out rights are available B. Before the information is initially communicated, the bank must give the consumer the opportunity to opt out of the communication C. Before the information is communicated, the bank must provide the consumer with a list of all the ways the information might be used D. Before the information is communicated, the bank must instruct the consumer to contact the affiliate by phone to limit use

Under the FCRA, the consumer has the right to an explanation when a user denies credit, insurance, or employment based in whole or in part on information in a consumer report. What is the notice provided to the consumer commonly called? A. information sharing B. adverse action C. permissible purpose D. opt out

Upon request, ABC Appraisal Services provided FNB an appraisal of a home owned by a home equity loan applicant. However, although the applicant's credit, debt to income, and employment length were all great, the home value was not enough to qualify for the loan. Under the FCRA and ECOA which statement is correct? A. The bank must send the FCRA and ECOA adverse action notices to the applicant B. The bank need only send the ECOA adverse action notice to the applicant C. The bank does not send anything as the reason for denial had nothing to do with credit D. The bank need only send the FCRA adverse action notice to the applicant

When must a financial institution develop the list of eligibility criteria for a prescreened offer of credit? A. After the consumer responds to the offer B. Before submitting the request to a consumer reporting agency C. As soon as the customer is approved but before closing the loan D. Before the bank determines what product will be offered

Which two actions are furnishers responsible for when reporting information to a consumer reporting agency? A) Contacting the consumer reporting agency to ensure there are no identity theft reports on file B) Ensuring all information is accurate and complete C) Providing a notice of negative information reporting D) Providing consumers with a notice informing them that positive credit information has been or will be reported to the consumer reporting agency

B & C

A bank affiliated insurance agency declined an application for life insurance due to info from the applicant's consumer report. Which statement best describes the entity's responsibility to the applicant under the FCRA? A. Provide a copy of the consumer report and consumer's rights at the time of actual denial so that the applicant may dispute the report if it is incorrect B. Provide a copy of the consumer report and consumer's rights in advance of the actual denial so that the applicant may dispute the report if it is incorrect C. Provide an FCRA adverse action notice D. Provide only a copy of the consumer report in advance of the actual denial so that the applicant may dispute it if it is incorrect

A compliance officer is monitoring a bank's credit reports for compliance with the FCRA requirements. Which of the following is NOT a permissible purpose for obtaining and using the consumer report? A. application to open a new personal deposit account B. annual review of a personal credit card account before issuing a renewal card C. review of the personal credit history of a prospective customer on whom the bank officer plans to call D. application for a commercial loan by an individual where the individual authorized the bank to investigate his credit history

FNB has an affiliated insurance company, FSB Insurance. In which of the following cases would the consume receiving the marketing materials have to have received the affiliate marketing opt out opportunity? A. FNB obtains credit score qualification information from FNB Insurance to identify which of the bank's loan customers would be eligible for FNB Insurance's products. the bank sends the qualified customers an FNB Insurance brochure B. FNB, using a city phone directory, sends a brochure containing marketing materials on its own products, as well as FNB Insurance's products C. FNB Insurance receives individualized credit score info from FNB about the bank's loan customers. After selecting eligible customers from the list, FNB Insurance sends a qualified list back to FNB who sends the FNB Insurance marketing materials to the selected bank customers D. FNB sends its own customers a marketing brochure containing info about its own loan products

To avoid being considered a "consumer reporting agency" the FCRA requires banks that regularly purchase dealer paper from automobile dealers to be sure that the: A. Dealer properly discloses the reasons for a denial of credit B. bank's name does not appear on the application or on the contract signed by the customer C. dealer reports to the consumer the name and address of the bank D. statement of disclaimer of liability is on any application for credit purchased by the bank

When a consumer disputes the completeness or accuracy of the information a furnisher provided to a consumer reporting agency, what must the furnisher do upon receiving notice from the consumer reporting agency? A. It must promptly delete all information and block reporting B. It must report to the consumer that it is investigating the alleged dispute C. It must investigate the disputed information within 30 days D. It must extend the investigation by an additional 90 days if the consumer is uncooperative

Which purpose is permissible for obtaining a consumer report under the Fair Credit Reporting Act (FCRA)? A. To market the bank's products and services B. For an unsecured line of credit on a non-applicant spouse in a non-community property state C. For a legitimate business need connected to a consumer-initiated business transaction D. To review consumer closed-end credit accounts

Who must be provided risk based pricing notices if the lender has 4 or fewer pricing tiers?

Consumers in all tiers except the top tier

Who must be provided risk based pricing notices if the lenders had 5 or more pricing tiers?

Consumers in all tiers except the top two tiers

Banks typically rely on four of the statute's permissible purposes. Name them.

Credit transaction Business need Account review Consumer request

A bank denies an applicant a new deposit account due in part to negative info (consistent overdrafts) in a report from a specialty consumer reporting agency that reports on check writing activity. What step must the bank now take in terms of the FCRA and ECOA? A. Provide the applicant with the FCRA and ECOA adverse action notices B. Provide the applicant with the ECOA adverse action notice C. Provide the applicant with the FCRA adverse action notice and a credit score D. Provide the applicant with the FCRA adverse action notice

A bank has decided to begin obtaining consumer reports on all applicants for bank positions. The head of human resources is unfamiliar with the Fair Credit Reporting Act (FCRA) and asks how the bank may have a permissible purpose to obtain consumer reports for hiring purposes. What should the head of human resource be told? A. Written consent from the applicant is required, but only for high-level jobs such as Senior VP or Executive Officer B. The bank must obtain verbal consent on a recorded line and document the applicant's file C. There is no requirement to do anything because by applying for a position, the applicant is giving consent D. The bank must have the applicant's written permission to obtain a consumer report

Consumer reporting agencies may provide consumer reports only if the user has intentions to use the report in connection with employment, a credit transaction, other permissible business transactions, or review of an existing account. These acceptable user intentions are called by what name under the FCRA? A. customer inquiry B. adverse actions C. Specialty CRA D. permissible purpose

FNB is a new bank that will focus on offering financial services to consumers. The compliance officer needs to comply with the identity theft prevention requirements of the FACT act. What should they do first? A. write a compliant policy that the board can approve B. establish procedures for handling address changes C. appoint a task force to establish compliance priorities D. perform a risk assessment of the bank's risk factors for identity theft

FNB received a credit application for a home equity loan. Bank policy prohibits originating loans to applicants that are 60 days or more past due on other obligations. The applicant indicated that he has a $75M loan from the Overton Cancer Center. The bank called the cancer center to check the credit history and balance on the loan. The bank discovered that the applicant is 4 months past due on the loan. Based on this info, the bank denied the home equity credit application. Which statement is correct? A. the bank's denial, based on the info, was wrong because the fact that he had a loan from the cancer center involves medical info about the consumer B. the bank should not have contacted the cancer center at all because doing so involves medical info about the consumer C. the bank should have had disclosed on its consumer application that medically related debts do not have to be listed D. the bank acted correctly because it treated the applicant's medical debt just as it would any other debt

If a dispute is submitted directly to the bank, the bank has 30 days to conduct a reasonable investigation, review all relevant information provided by the consumer, and complete its investigation (though it may have an additional 15 days in some cases). When can a bank decline to investigate a dispute? A. The individuals are disputing the reporting of an account they never had B. The individual has been a bank customer for less than 30 days C. The dispute involves information that is more than 2 years old D. The dispute is frivolous or irrelevant such as one that has already been investigated

If a financial institution considers sharing consumer report information with an affiliate, outside of the exceptions, it may be considered a consumer reporting agency under the FCRA. What can it do to avoid becoming a consumer reporting agency? A. Make a business decision not to have affiliates B. Share outside the exceptions, but post a notice on the bank's website C. Never share anything with anyone for any reason D. Structure their information-sharing practices within the exceptions

In which of the following cases must a furnisher of consumer info investigate the dispute? A. a dispute submitted by a credit repair company on behalf of one of the furnisher's customers B. a dispute submitted by one of the furnisher's customers on a form supplied by a credit repair company C. a dispute about a charged off loan for which the consumer refused to provide his social security number D. a dispute about a delinquent account that has been previously submitted but upon which the furnisher took no action

Rhonda, the bank compliance officer, is conducting Federal Credit Reporting Act (FCRA) training regarding prescreening and required consumer notices that must accompany the prescreened offer of credit. Which description identifies the content of those notices? A. The notice must state the consumer is receiving the offer because they meet certain criteria and they may not opt out of these types of offers B. The notice must state the consumer is receiving the offer because they meet certain criteria and they must wait 90 days to contact the consumer reporting agency to opt out C. The notice must state the consumer is receiving the offer and must accept the offer from the bank in order to exercise any opt-out rights going forward D. The notice must state the consumer is receiving the offer because they meet certain criteria and they may contact the consumer reporting agency to opt out

Which consumer record type may a financial institution share with an affiliate without an opt-out under the FCRA? A. Information from the consumer's credit application identifying the consumer's assets and liabilities B. Information from the consumer's credit report regarding past due payments C. Information concerning the consumer's credit score and reasons for the score D. Information concerning consumer loan or checking account history with the bank

A lender is still required to provide a risk based pricing notice to a consumer that was identified through the use of a prescreen list

False

An ECOA notice must be provided to each applicant if there are multiple applicants

False

Banks may use a prescreened list solely to send promotional material

False

Banks that have obtained a consumer report for one purpose, such as a loan application, may re-use the same report for a subsequent request for credit if it is made within 3 months.

False

How frequently do lenders have to re-calculate the cutoff scores for the credit proxy method?

No less than every 2 years. If the lender is using the secondary source method based on market research or using the method of another party due to an acquisition/merger must base the cutoff score on its own customer data within one year

Is a FCRA notice required for adverse action based on information from a third party that is not a CRA or affiliate?

No, however they would still receive an ECOA notice that explains the consumer can make a written request for the reasons for adverse action within 60 days

True or False: Banks also have a permissible purpose to obtain a consumer report on a non-applicant spouse or guarantor

True if the applicant resides in a community property state

Mrs. Williams applies to rent an apartment from Better Living Apartments. She has been a customer of FNB for several years, so she lists the bank as a credit reference. Better Living sends the bank a credit inquiry letter, and the bank sends Better Living a list of Mrs. William's bank transactions. The report states that she's has had several insufficient checks on her account over the last tow months and that she has satisfactorily paid off a car loan. Better Living calls the bank and speaks to the loan officer. The loan officer states that Mrs. Williams applies for a loan three months ago, and was denied because of a slow-pay report from ABC Department Store that appeared on Mrs. William's credit report. Did the bank give Better Living a consumer report under the FCRA? a. No. providing limited amounts of information from others will not cause the bank to be covered under the FCRA b. Yes. By giving deposit-related information concerning returned checks, the bank created a consumer report c. Yes. The bank gave credit information it received from another source d. No. The ABC Department store information was part of the bank's own experience, because it was use by the bank to make a credit decision

FCRA Reg V

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