Reg Z: TILA Flashcards Preview

CRCM > Reg Z: TILA > Flashcards

Flashcards in Reg Z: TILA Deck (143):
1

If a creditor plans to make changes to the terms of a credit card, what must the creditor do before the changes take effect?

It must give the consumer the option to cancel the card before the changes take effect.

2

What are the institution's responsibilities regarding credit balances on open-end loans?

Must make a good faith effort to return/refund the balance to the consumer if the credit is on the account for more than 6 months.

3

Can creditors charge a fee based on different payment methods, for example, phone payments vs online payments?

No, this is prohibited by Reg Z.

4

When is a loan considered a Private Education Loan?

Only if the loan is for closed-end, non-real estate secured loans in which any of the funds of the loan is to finance post secondary education.

5

Are there any times where a loan with a 45% DTI ratio can be a QM loan?

Yes, if it meets GSE government guarantee or insurance tests (Fannie and Freddie).

6

What is a bona fide emergency?

Loss of home or loss of health are generally the only two permissible bona fide emergencies per regulators.

7

Are there APR or finance change tolerances for open end credit?

No. Tolerances apply to closed end mortgages only.

8

It's ok to charge a fee of up to $__ if the violation is a repeat violation on a credit card.

$35

9

For purposes of calculating an APR, an "irregular transaction" includes:

a. Multiple advance construction loans
b. A single payment loan
c. A loan with a final balloon payment
d. A loan with quarterly payments

a. Multiple advance construction loans

10

Which of the following is incorrect regarding credit card disclosure requirements?

a. 30 days notice for COT (rate or other significant changes)
b. Minimum payment disclosures
c. Late payment disclosures
d. Renewal disclosures for COT

a. 30 days notice for COT (rate or other significant changes)

It's 45 days

11

T/F: Special early disclosure requirements for credit card solicitations and applications do NOT apply to lines of credit assessed solely by account numbers.

T

12

How many days does a consumer have to make payments on a credit card from when the institution mails the statement?

a. 7 days
b. 14 days
c. 21 days
d. 30 days

c. 21 days

13

An institution must send periodic statements on an open-end loan if there is a _____ on the account.

balance

14

If a creditor plans to increase the interest rate or other fees on a credit card account, or increase the required minimum payment, it must send the consumer a notice 45 days before:

a. Increasing the interest rate
b. Changing certain fees
c. Making other significant changes to the terms of the account.
d. All of the above.

d. All of the above.

15

Which of the following are true? Card issuers cannot impose a fee for:

a. Declining to authorize a transaction
b. Inactivity, such as when the consumer is no longer using the account.
c. Closing or terminating the account

a, b, and c. All are true.

16

Rescission provisions does not apply to which types of loans?

Purchase money loans.
Refi of the loan with no new money. (if new money was included, the new money would apply to ROR rules)

17

If the institution sells the loan, are there any disclosure requirements?

Yes, Notice of Sale of Transfer must be sent to all loans that are secured by a borrower's principal dwelling if their loan has been sold or transferred.

The notice must be sent by the selling institution (not the transferrer) and applies when the asset is sold to affiliates.

18

Does the periodic rate have to appear on the periodic statement of an open-end account?

Yes. Any periodic rate that may be used to calculate the finance charge, the type of the transaction and the range of the balances to which it applies and the corresponding APR are all required on the statement, in addition to some other requirements.

19

What are the two types of QM? what is the difference between the two?

Safe harbor and rebuttable presumption loan. Difference = the rate.

If the rate is above a certain standard, it will be subject only to rebuttable presumption compliance rather than safe harbor. Safe Harbor = less risky from a legal standpoint.

20

A credit card issuer cannot assess a fee on the consumer's account for an over-the-limit transaction unless:

a. The card issuer gives notice describing the consumer's right to consent or "opt in" to the payment of over-the-limit transactions
b. the creditor obtains the consumer's consent to charge a fee to pay over-the-limit transactions.
c. Both A and B

c. Both A and B

21

If the loan meets the definition of HOEPA, what disclosure requirements are there?

There are additional disclosures required and home ownership counseling is required before the loan can be closed.

22

When are appraisals required for Reg Z?

Consumer purpose home-secured loans.

23

What is a prepaid finance charge?

Finance charges paid at some point in time before repayment of the loan starts.

24

When must the appraisal DISCLOSURE for an HPML be delivered?

Disclosure must be delivered or mailed no later than 3 business days after application.

25

Are QM rules required?

No

26

What PEL requirement is a form from the school?

Certificate in the loan file from the college or university attended. This must be received prior to funding.

27

Are there any restrictions about credit card payment due dates?

Yes, it must be the same date each month (for example, the 15th or the last day of the month).

28

What loans are covered under HOEPA?

Consumer loans secured by the consumer's PRINCIPAL dwelling, includes HELOCs.

* TIP: There are 5 letters in HOEPA and HELOC.

29

When must a periodic statement be delivered by (OE that is not a credit card)?

A creditor must provide a statement within 14 days of the due date for the minimum payment.

30

Among other things, a change-in-terms must contain:

a. A statement that the consumer has the right to opt out of the changes.
b. The date the changes are effective.
c. A statement that changes are being made to the account and a summary of those changes.
d. All of the above.

d. All of the above.

31

T/F: Prison time and fines can be handed out for Reg Z violations.

T

32

For open-end loans, are there any subsequent disclosure requirements after an account has been opened?

Yes, for any open-end consumer credit plan (excluding home-secured lines), you must provide a written COT notice of a significant change to an account term or an increase in the required minimum periodic payment at least 45 days before the effective date of the change.

Additionally, creditors must provide a written notice if you increase the account rate because the consumer is in default or delinquent on their payments or if you have identified certain events in your account agreement that trigger the increase, such as obtaining an extension of credit that exceeds their limits, if applicable. This also must be provided 45 days before the increase takes place.

33

What is the prepayment penalties test for HOEPA?

More than 36 months after consummation or account opening OR in an amount more than 2% of the amount prepaid.

34

What is a Reg Z LO?

An individual that performs loan origination activities for compensation or other monetary gain.
Activities that make a LO:
- taking an application
- arranging a credit transaction
- assisting a consumer apply for credit
- offering or negotiating terms
- making an extension of credit

35

What loans require ATR or QM provisions?

Closed-end, first or second lien credit transactions that are secured by a dwelling.

36

Is an application fee to all applicants a finance charge?

No, because this is paid regardless if the loan is originated or not.

37

What does HPML stand for?

Higher priced mortgage loan

38

Is a line of credit secured by a vacation rental considered a HELOC?

Yes

39

Who gets the Right of Rescission?

Anyone that has an ownership interest in the dwelling AND is someone's PRINCIPAL dwelling.

40

What is APOR?

Average Prime Offer Rate

41

What disclosure is required at the time an application is provided or a non-refundable fee is paid on an ARM loan? What if it's a telephone app?

CHARM booklet: Consumer Handbook on Adjustable Rate Mortgages and program disclosure.

if telephone app, must be delivered within 3 business days.

42

What loans are not covered under Reg Z?

Certain loans above a specified amount are not covered. The dollar threshold for loans when they are not secured by real property or property that serves as the borrower's principal dwelling is adjusted annually based on changes in the Consumer Price Index.

43

After being notified of a billing error, a creditor may continue to bill the consumer during the error resolution period only if the billing statement indicates that the disputed amount and related charges:

a. Will be refunded if the dispute is resolved in the cardholder's favor.
b. Do not have to be paid before the situation is resolved.

b. Do not have to be paid before the situation is resolved.

44

Does a creditor have to consider the consumer's ATR for credit cards?

Yes, but it's not as rigorous as the mortgage ATR rules. Do not have to have reasonable documentation, can take a consumer's word for it that they have the income.

45

What are the 8 minimum underwriting standards for ATR?

- Current or reasonably expected income or assets
- Current employment status
- Monthly payment on the covered transaction
- Monthly payment on any simultaneous loan
- Monthly payment for mortgage-related obligation
- Current debt obligations, alimony, child support
- Monthly DTI or residual income
- Credit history

46

What is the high fees test for HOEPA?

Loans total points and fees exceeds 5% if the loan amount exceeds the threshold ($20,391). 8% for smaller loan amounts less than the threshold ($20,391).

47

Is an appraisal or credit report fee a finance charge?

Yes, except for a real property or residential mortgage transaction.

48

What are the disclosure requirements on a HELOC at the time of application?

Must provide program disclosures and the booklet: What You Need to Know about Home Equity Lines of Credit.

Must be given at the time of application or within 3 business days if by phone.

49

What is the rate for a safe harbor QM loan?

APR is lower than the QM threshold: 1.5% (first lien) or 3.5% (second lien) above APOR.

50

What is an ARM?

Adjustable Rate Mortgage

51

What is the false statement?

a. If a credit card has a variable rate tied to an index, the rate can go up whenever the index goes up without prior notification to the cardholder.
b. A change in credit insurance carriers need not be disclosed to the cardholder
c. If a creditor plans to decrease the credit limit, notification must be given before a penalty fee or rate can be imposed for exceeding the limit.

b. A change in credit insurance carriers need not be disclosed to the cardholder

52

Is an overdraft line of credit accessed by a debit card considered a credit card?

No

53

Which of the following are permitted compensation practices for Reg Z loan originators?

a. Receiving compensation based on interest rates or points
b. Receiving compensation from a lender or another party if the originator already received compensation from the consumer.
c. Directing or steering a consumer to accept a mortgage loan that is not in the consumer's interest in order to increase a LO's compensation.
d. Receiving compensation based on percentage of a loan amount.

d. Receiving compensation based on percentage of a loan amount.

54

What are the prepayment penalty limitations for a HOEPA loan?

More than 36 months after consummation or account opening OR in an amount more than 2% of the amount prepaid

55

What are the special appraisal requirements for a flipping loan that is also a HPML?

Must obtain a second appraisal (at no cost to the applicant)

56

If a consumer fails to pay the $10 minimum payment on their credit card, what is the maximum penalty fee the creditor can charge?

$10.

Reg Z prohibits penalty fees from exceeding the dollar amount associated with the violation.

57

Y/N: Stan and Bernice Holland are joint account holders of a credit card with Citywide Financial. Stan has passed away. Is Citywide bound by the requirement of Reg Z to notify the administrator of Stan Holland's estate of the balance due on the credit card account?

No

58

Which of the following statements about Reg Z credit card rules is false?

a. A card issuer may never open a credit card account for a consumer under 21 years of age.
b. Reg Z prohibits credit card issuers from using two-cycle (or double-cycle) billing.
c. The total fees charged to a credit card account during its first year generally cannot exceed 25% of the initial credit limit.

a. A card issuer may never open a credit card account for a consumer under 21 years of age.

59

Formatting rules for periodic disclosures require that:

a. The due date must be disclosed on the first page of the statement
b. The amount of the late payment fee and the APR(s) must be stated in close proximity to the due date
c. The ending balance must be disclosed in close proximity to the minimum payment due.
d. All of the above

d. All of the above

60

If a loan is an HPML, what are the 3 requirements?

- Can't make the loan without considering the borrowers ATR (remember these are old rules, before ATR as we know it today) from sources other than the home's value.
- Prepayments are restricted.
- Escrowing is required for taxes and homeowners insurance if the lien is a first lien (must be in place for 5 years, must provide an opportunity to opt out after 5 years)

61

Which of the following are true? In regard to credit car bills, generally, a credit card company must:

a. Mail or deliver a credit card bill at least 21 days before a payment due date
b. Use the same due date each month
c. Use a cut-off time for the due date that is no earlier than 5 pm.

a, b, and c. All are true.

62

T/F: Creditors are NOT allowed to charge inactivity fees.

T. This is prohibited by Reg Z.

63

When is a HPML considered a flipped property?

If the seller acquired the home within 180 days prior to the date of the applicant's purchase agreement and the sale price exceeds the seller's acquisition price by:
- 10% for properties acquired within the past 90 days
- 20% for properties acquired between 91 and 180 days earlier.

The 180 day time period is measured from the day after the date the seller acquired (became the legal owner of) the property up to and including the purchase date (the date the seller and buyer signed the sales agreement).

64

T/F: A card issuer cannot assess a fee for an over-the-limit transaction without obtaining the consumer's consent to pay such transactions.

T

65

What is the definition of a HPML?

Closed-end loans secured by the consumer's PRINCIPAL dwelling in which the APR exceeds the APOR by more than a specified percentage depending on the lien position.

First lien: APR exceeds APOR by 1.5%
Second lien: APR exceeds APOR by 3.5%

66

T/F: Creditors must provide account-opening disclosures in the form of a table with the headings, content and format substantially similar to the application and solicitation disclosures.

T

67

Rescission period runs until midnight of the third business day after:

a. Consummation of the loan
b. Delivery of 2 copies of the notice of the Right to Rescind to each eligible party
c. Delivery of material disclosures to each eligible party
d. Three business days from when all of the above are completed.

d. Three business days from when all of the above are completed.

68

If there is a COT on an open-end account, when must a COT be delivered to consumers?

At least 45 days before the adverse change.

69

For HELOCs, what early disclosures must be provided?

"What You Should Know About Home Equity Lines of Credit."

This must be provided at the time of application or if the app is take by phone, the Bank must send this disclosure within 3 business days.

70

For mortgage loans, there is a $___ tolerance for underdisclosing finance charges.

$100

71

T/F: A card issuer is prohibited from using offset on a cardholder's deposit account to pay for or secure a credit card account unless the account was specifically secured by the deposit account when the credit card was created.

T

72

T/F: A disclosure pertaining to when an introductory rate may be revoked and e rate that will apply after it has been revoked (if applicable) must be included INSIDE the table on the account opening disclosures.

F. This information should appear directly below the table.

73

Are there any special credit card requirements for consumers 21 and under?

Must ensure independent ability to repay that loan (trust fund, job or co-signer)

74

What is the definition of finance charge?

The dollar amount the credit will cost you.

75

T/F: A creditor must credit a payment to the consumer's account as of the date of receipt, except when a delay in crediting does not result in a finance or other charge.

T

76

If a credit card account has been opened, no increase in the credit limit may be made before the consumer attains the age of 21 unless a __ (who assumed liability at account opening) agrees in writing to assume liability on the increase.

a. Cosigner
b. Guarantor
c. Joint account holder
d. Any of the above.

d. Any of the above.

77

A woman is applying for an overdraft line of credit. She must receive account-opening disclosures:

a. Before she makes the first transaction of this open-end credit plan.
b. Before her institution sends the first periodic statement for this open-end credit plan.
c. Either of the above.

a. Before she makes the first transaction of this open-end credit plan.

78

What if the credit card payment due date lands on a weekend or holiday?

The cardholder has until the following business day to pay.

79

What are the prepayment penalty rules for ATR?

They are generally prohibited, unless:
- The APR can't increase after consummation
- The loan is a QM
- The loan is not an HPML

If allowed, the prepayment penalty
- Must not apply after the 3-years following consummation
- The penalty must not exceed the percentages of the amount of the outstanding loan balance prepaid.

80

When are the account opening disclosures required to be delivered on an open-end account?

Before the first transaction.

81

What is the difference between a refi and modification?

A refi requires new disclosures because it requires disclosures. New promissory note that replaces and an existing one.

A modification means changes to the terms of an existing deal, but no new note or agreement.

82

T/F: In most cases, if an account holder makes more than the minimum payment on a periodic credit card bill, the card company must first apply the excess amount to the balance with the highest interest rate.

True

83

If the card issuer plans to make change to the terms of a credit card account, it must give the account holder:

a. Two weeks' notice
b. One billing period to accept the changes
c. The option to cancel the card before the changes take effect.
d. All of the above.

c. The option to cancel the card before the changes take effect.

84

Is Saturday considered a business day for Right of Rescission?

Yes, whether or not the institution is open on Saturdays.

85

Can an institution delay funding of a rescindable loan after the third day until the bank is sure it won't be rescinded?

Yes (subject to state law).

86

Generally, the total amount of fees charged during the first year of a credit card account cannot total more than __% of the initial credit limit.

25%

87

What is the high rate test for HOEPA?

APR is 6.5 or 8.5% above APOR.
- 6.5% above APOR if secured by a first lien.
- 8.5% above APOR if secured by a second lien

88

What are the requirements for all QM loans?

- no negative amortization, interest-only or terms above 30 years
- no balloon payment (unless you're a small creditor)
- 43% or lower DTI (use Appendix Q)
- points and fees can't be above a threshold (3% of $101,953) -- don't need to know thresholds!

89

What borrowers are covered under Reg Z?

Consumers, natural persons.

Consumer Trusts too as of 10/3/15

90

What types of transactions do the ATR rules apply to?

Closed-end dwelling secured loan transactions.

91

What are the three additional disclosures required for a PEL?

Application disclosure - at the time of application with general information about rates, terms, and fees, as well as an example of total loan cost

Approval disclosure - at the time of approval, with transaction specific information, includes total repayment amount and maximum monthly payment.

Final TIL - at closing with Right of Rescission language

92

T/F: Under no circumstances can a credit card issuer increase the interest rate for the first 12 month after an account is opened.

F. There are exceptions.

93

Can a creditor charge an over the limit fee?

Yes, but only if the credit card holder opts in to be CHARGED, not opting in for the coverage.

94

When must disclosures be provided on an open-end loan?

Before the first draw on the account

95

A card issuer must adopt reasonable procedures to ensure that periodic statements are mailed or delivered at least __ days prior to the payment due date disclosed on the statement

a. 10
b. 15
c. 21
d. 30

c. 21

96

T/F: If a consumer does not opt in to over-the-limit transactions and the credit card company allows such a transaction to go through, the issuer may still charge an over-the-limit fee.

F

97

What loan purpose is covered under Reg Z?

Loans primarily for personal, family or household purposes. If close to 50/50 consumer/commercial purpose, treat it as a consumer loan.

98

Which of the following is classified as a finance charge under Reg Z?

a. Voluntary credit life insurance
b. Construction loan inspection fee charged during the construction loan phase
c. Late charges
d. Initial flood determination fee

d. Initial flood determination fee

99

When must the billing error statement be provided to a consumer on an open-end account?

Annually or with periodic statements

100

What is the amount financed?

It is the denominator in the APR calculation. Amount of the prepaids - principal amount = amount financed.

101

A customer has just a received a periodic statement for a fixed-rate plan. Which of the following does NOT need to be included?

a. The account balance at the beginning of the billing cycle.
b. An identification of each credit transaction.
c. Any payments credited during the billing cycle.
d. A statement that the periodic rate may vary.

d. A statement that the periodic rate may vary.

102

Early application disclosures for credit card accounts must include which of the following in table format?

a. Annual or periodic fees
b. Balance transfer fees
c. The grace period
d. All of the above

d. All of the above

103

When must the Notice of Sale of Transfer be provided to the consumer?

Must be mailed or delivered on or before the 30th calendar day after the date of sale or transfer.

104

T/F: On periodic statements, it's at your institution's discretion whether or not to include any grace period offered.

F

105

How are QM loans better than ATR loans?

Lower classification of risk and liability. QM = lower risk.

106

Early disclosure requirements for credit card solicitations and applications apply to which of the following?

a. Telephone solicitations for credit cards
b. Applications for lines of credit accessed solely by account numbers
c. "Take one" brochures for credit cards

a & c.

107

CE/non mortgage: If there are multiple borrowers, does Reg Z require that disclosures be provided to each borrower?

No. Primary only if readily determined

108

How does HOEPA differ from HPML?

HOEPA loans have an even higher rate than HPML.

109

What is HOEPA stand for?

Home Ownership Equity Protection Act. Also referred to as Section 32.

110

What is the small creditor test?

- total assets of less than $2 billion, and
- originated 500 or fewer first lien covered transactions, and
- extended more than half of those covered first lien transactions for properties in rural or underserved counties (per CFPB list)

So long as meet these requirements and have a balloon payment and meet other QM rules, then IS a QM loan.

111

A credit card company has increased the interest rate on an account after the first year. How does the new rate apply?

a. It applies only to new charges
b. It applies to new charges and the balance of the account
c. It applies only to the "protected balance"

a. It applies only to new charges

112

When must the appraisal for an HPML be delivered?

Copy of all written appraisals must be delivered no later than 3 business days before close. Can't be waived, which is different than Reg B (Reg B can waive).

113

What is the definition of an ARM?

- The loan has a variable rate that may go UP, and
- The loan is secured by the borrower's principal dwelling, and
- The loan has a term of greater than 1 year

114

What are the additional appraisal rules for HPMLs?

Appraisal must be done by a certified or licensed appraiser and include a physical inspection of the interior of the home, but not if the loan amount is $25,000 or less.

115

T/F: With a few exceptions, a credit card company cannot increase the interest rate for the first 12 months after a credit card account is opened.

True

116

Is a credit card that accesses a home equity plan a credit card?

No

117

What is the rate for a rebuttable presumption QM loan?

APR is higher than the QM threshold: 1.5% (first lien) or 3.5% (second lien) above APOR.

118

For purposes of rescission, a bank must use the following definition of a "business day:"

a. Monday through Sunday
b. Monday through Friday excluding federal legal holidays
c. Any day that the bank is open to the public for conducting substantially all of its business functions
d. Monday through Saturday excluding federal legal holidays

d. Monday through Saturday excluding federal legal holidays

119

What are the verification requirements for ATR?

Must obtain reasonably reliable supporting information to verify the information used to evaluate the 8 underwriting factors to determine the consumer's ATR. Can't rely on applicant's word. Must verify.

120

Are there any consumer loans that aren't covered under Reg Z?

Yes, Reg Z doesn't apply if a loan is
- not secured by real estate or is a secondary education loan, AND
- more than $54,600 (like a car loan or student loan for $80,000).

121

T/F: If you offer a grace period on open-end accounts that are not credit cards, you may not treat a payment as late unless you send a periodic statement at least 21 days before the date on which any grace period expires.

T

122

CE/non mortgage: What components of the disclosure must be more conspicuous than others?

APR & finance charge must be in the "fed box"

123

Refi or Modification? Changing the term from a variable rate to a fixed rate.

Refi. Although we're only changing a term, it requires redisclosure, so it seems like a modification, but it's actually a refi. This is an exception under Reg Z.

124

Credit card account-opening disclosures are required before:

a. The first transaction is made under the plan.
b. Any fee is collected.
c. An account that was closed is reopened.
d. All of the above.

d. All of the above.

125

What are points and fees?

They are used to determine whether a mortgage loan triggers application of the TILA high-cost mortgage provisions under the points and fees test, and whether a loan satisfies the points and fees limitation to be a QM under the TILA ATR provisions.

126

When must a creditor provide a periodic statement for an open-end account?

At the end of each billing cycle in which the account has a finance charge or a debit or credit balance of at least $1.

127

Reg Z prohibits lenders from charging penalty fees greater than $__ for late payments or otherwise violating the account's terms.

$25

128

What is the two-part analysis to determine if a fee is a finance charge?

1. The lender requires the service. Can I get the loan without utilizing this service? Would the fee be paid if a comparable cash transaction?
2. The borrower pays the fee.

129

What is ATR? What does it mean?

Ability to Repay. The bank has to make a reasonable determination before the close of the loan to ensure the borrower has the ability to repay the loan.

130

Which of these changes requires a COT notice?

a. Increase of credit limit
b. Minimum periodic payment increased
c. One insurer substituted for another
d. Termination of credit priviledges

b. Minimum periodic payment increased

131

T/F: A creditor is prohibited from imposing a finance charge on any balances that were repaid within the grace period.

T

132

A card issuer that imposes an annual or other periodic fee to renew a credit card must mail or deliver written notice of the renewal to the cardholder ___ before a renewal fee is payable.

a. 30 days
b. One billing cycle
c. a or b, whichever is less

c. a or b, whichever is less

133

Generally, when is a TIL disclosure required?

Consumer credit to be used for personal, family or household purposes and when credit is subject to finance charges or is to be repaid in more than 4 or more installments .

134

Is set off permitted on a credit card?

No, unless the consumer signed a prior agreement

135

If a bank originates certain high cost closed-end mortgage loans, it must be sure to avoid which of the following loan terms for such loans?

a. Due on sale clauses
b. Late charges
c. Adjustable rate
d. Negative amortization

d. Negative amortization

136

CE/non mortgage: When are disclosure provided?

Before or at the time of consummation

137

What makes a loan a "safe harbor" QM loan?

If it meets the definition of a "QM", is NOT a higher-priced covered transaction, and the creditor complies with the requirements for origination of a QM.

138

What is the difference between a higher-priced covered transaction (HPCT) and an HPML?

A HPCT is a consumer credit transaction that is secured by a dwelling, including any real property that's attached to a dwelling, in which the APR exceeds the APOR by 1.5% if a first-lien or 3.5% if a subordinate lien.

A HPML is a any CLOSED-END consumer credit transaction that is secured by a PRINCIPAL dwelling, in which the APR exceeds the APOR by 1.5% if a first lien and 3.5% if a subordinate lien.

139

When a creditor makes a significant change in terms of a credit card account, the creditor must:

a. Provide affected consumers with a notice that includes a statement that the consumer may reject the change and continue to use the account for a period of 6 months under the existing terms
b. Provide affected consumers with a notice that includes a statement that the consumer may reject the change but the consumer's ability to use the account for further advances will be terminated or suspended
c. Provide affected consumers with a notice that includes a demand for payment in full of the account balance with at least a 60 day grace period
d. Provide consumers with a statement of reasons for the change

b. Provide affected consumers with a notice that includes a statement that the consumer may reject the change but the consumer's ability to use the account for further advances will be terminated or suspended

140

ABC Bank is assessing its product line in preparation for the January 10, 2014 implementation of the new Regulation Z Ability to Repay requirements for covered transactions. Which of its real estate products are going to be subject to the ATR standards?

a. ABC Home Equity Line of Credit
b. ABC Home Mortgage
c. Senior Dream Reverse Mortgage
d. ABC Build-it-Your-Way Construction Loan

b. ABC Home Mortgage

141

ABC Bank is pulling together an implementation team for the new TRID disclosures that take effect on October 3, 2015. Which of the following loan product managers does NOT need to be included in the implementation meetings to plan for the new disclosures?

a. Home Equity Line of Credit product manager
b. Consumer Construction Loan product manager
c. Retail Mortgage Loan product manager
d. Secondary Market Mortgage Loan product manager

a. Home Equity Line of Credit product manager

142

When comparing closing costs on the Loan Estimate form to the Closing Disclosure, which fees are subject to the zero tolerance?

a. Prepaid interest
b. Fees paid to unaffiliated third parties for services that the consumer is permitted to shop for
c. Origination charges
d. Recording fees

c. Origination charges

143

What does TILA cover?

Consumer credit that is subject to a finance charge or is payable in more than 4 installments.

Credit cards
Payday loans
Consumer home equity applications offered by noncreditors.