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WGU-LWC1-Cnsmr Cred
| Question | Answer |
|---|---|
| Truth in Lending Act applies to a transaction only if: | It is a consumer loan. not a business loan loan has a finance charge or will be repaid in more than four installments. loan is less than $25,000 or secured by a mortgage on real estate. The loan is made by someone in the business of offering credit. |
| Required Disclosure in all loans regulated by TILA | o The disclosure must be clear and in meaningful sequence. o The lender must disclose the finance charge. o The creditor must also disclose the annual percentage rate (APR). |
| Defiition - • Open-End Credit | a credit transaction in which the lender makes a series of loans that the consumer can repay at once or in installments (credit Card). |
| In each Open End Credit statement, the lender must disclose: | previous balance; amounts & dates of all purchases, credits & payments; finance charges/late fees; the date bill must be paid to avoid charges; either the consequences of making the monthly minimum payment or toll free number for information. |
| Definition - • Closed-End Credit | there is only one loan, and the borrower knows the amount and the payment schedule in advance. |
| TILA involvement in home equity loans | If loan has APR more than 10% pts above Treas sec, or consumer pays fees/pts higher than 8% -then- 3 days before closing, lender must notify consmr he doesn't have to(even if signed) & he could lose house, & Loans less than 5 yrs can't have balloon pay |
| What three tests does the FTC use to judge unfair practices? | It causes a substantial consumer physical or financial injury. The harm of the injury outweighs any countervailing benefit. The consumer could not reasonably avoid the injury. The FTC is particularly vigilant in protecting susceptible consumers |
| Sales Practices monitored by the FTC | Bait and Switch, Mail or Telephone Order Merchandise, Unordered Merchandise,Door-to-Door Sales, |
| What are the rules of recission in the TILA? | cnsmrs right to rescind mortgage for up to 3 days after sign(including Sat).If lender doesn't comply with TILA disclsre provs, cnsmr can rescind for up to 3 yrs from mortgage dt. Rt of rescission not appl. to 1st house mortgage or refi with existing lndr |
| In all loans regulated by TILA: | • The disclosure must be clear and in meaningful sequence, and • The lender must disclose the finance charge and the annual percentage rate (APR). |
| Rules of Fair Credit Billing Act (1975) | 60 days- if cnsmr writes CC, must acknowledge by 30 days. 2 bill cycles (not past 90 days)-cc must respond. Err=fix & notify. No err=write & explain. If requested, cc to supply docs. No collect/close/suspend til response to cnsmr. CC can't report to til 1 |
| Definiton - Fair Credit Reporting Act | ensure that consumer credit reports are accurate. regulates consumer reporting agencies. |
| Under the Fair Credit Reporting Act: | Reporonly for legit biz. Agency can't report old info (7 yrs, bankruptcies after 10).If cnsmr applies for more than 150k of cred or life ins, or $75k/yr+ job, no time limit. Char Rep Report r old in 3 months. Report cant be w/o telling cnsmr. |
| Fair and Accurate Credit Transactions Act | - to reduce identity theft |
| The Fair and Accurate Credit Transactions Act: | cnsmrs=1 reprt/yr from 3 agencies. Nat'l Fraud Alert Sys to let id theft ppl to alert credit files to check b4 new cred. Req bureaus shr info re:theft. Gramm-Leach-Bliley Privacy Act-$Co & report Co notify cnsmr b4 release, or if breach. No give prvt info |
| Definiton - Fair Debt Collection Practices Act | a collector must, within 5 days of contacting debtor, send debtor written notice w/amount, name of creditor, & statmnt if the debtor disputes(in writing),collector will cease all efforts til evidence is sent. |
| Under the Fair Debt Collection Practices Act, Collector cannot | Call/write Db who has notified in writing. Call/write DB w/attorney. Call DB b4 8/after 9. Threaten DB. Call/visit DB at work if employer prohibits. Imply they r attns/gov reps. Threaten arrest/Make false threats. Contact DB peeps cept to find. Tell other |
| Definition - Equal Credit Opportunity Act | prohibits any creditor from discriminating against a borrower because of race, color, religion, national origin, sex, marital status, age (as long as the borrower is old enough to enter into a legal contract), or because the borrower is receiving welfare |
| The Consumer Leasing Act says that a Leaser must provide in writing: | Required pymnts/deposits, etc #/amount of monthly pymnts/calc Balloon pymnts Req Ins pymnts TTL paid by end Avail warranties Maintenance req/wear & use stndrds Late pymnts penalties Right to purchase/price Right to terminate early/penalties |
| Definition - Magnuson-Moss Warranty Act | Requires any supplier that offers a written warranty on a product that costs more than $15 to disclose the terms of the warranty in simple, understandable language before sale. Not required to offer warranty, if they do must indicate if full or limited |
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