106. The liability limitation for credit card holders who report a loss or theft is $50.
a. True
b. False
107. A credit card applicant can be solicited without disclosure of the card’s terms.
a. True
b. False
108. Under CARD, credit terms must last for at least two years.
a. True
b. False
109. Leases of consumer goods are not subject to disclosure requirements.
a. True
b. False
110. The Equal Credit Opportunity Act applies only to consumer transactions.
a. True
b. False
111. A spouse cannot apply for credit without the signature of his/her spouse.
a. True
b. False
112. Asking a couple’s plans for having children is a violation of the ECOA.
a. True
b. False
113. Requiring credit references for members of one race but not for another is a violation of the ECOA.
a. True
b. False
114. Asking that all sources of income be revealed on a credit application is prohibited by the ECOA.
a. True
b. False
115. The TILA provisions do not apply to commercial loans.
a. True
b. False
116. The subprime lending market uses title loans.
a. True
b. False
117. Predatory lending involves high interest rates and title loans.
a. True
b. False
118. The Fair Credit and Charge Card Disclosure Act prohibits issuing credit cards without the consumer’s consent.
a. True
b. False
119. The subprime lending market is also called the predatory lending market.
a. True
b. False
120. Many states have imposed additional steps for making loans in the subprime lending market.
a. True
b. False
121. The subprime lending market collapse in 2007 led to other credit crunches and business impacts.
a. True
b. False
122. An applicant for credit need not disclose spousal support income if he is not relying on it as an income source.
a. True
b. False
123. The spouse of a credit applicant must disclose his or her credit information if the credit application is for the
applicant’s business operations.
a. True
b. False
124. A credit application that asks for criminal convictions from the last five years violates the ECOA.
a. True
b. False
125. The Equal Credit Opportunity Act prohibits which of the following?
a. Basing the credit decision on the receipt of public assistance income.
b. Basing the credit decision on a bankruptcy of five years ago.
c. Basing the credit decision on the fact that the applicant was in prison for a felony three years ago.
d. Basing the credit decision on unemployment.
126. Which of the following questions on a credit application would be a violation of ECOA?
a. asking about felony convictions
b. asking address and length of residence
c. asking whether the applicant is pregnant
d. All of the above are violations.
127. The maximum liability for a credit card holder whose card is lost or stolen is:
a. $50.
b. $50 if the cardholder notifies the creditor.
c. $0.
d. none of the above
128. Which of the following is not required to be disclosed in the solicitation of a credit card customer?
a. fees for issuing the card
b. what your credit limit will be
c. APR for the card
d. All of the above must be disclosed.
129. Assume there is a credit contract for the purchase of the following items. Which one is not covered by TILA
disclosures?
a. a microwave for use in a CPA office
b. a computer for a home
c. a car by an employee that the employee will use to travel to sales calls
d. All of the above are covered.
130. Janet Kennedy has received a letter in the mail from BISA International, a credit card firm. The letter describes the
card as follows:
“This card is yours for only a small annual fee that is billed to your account. There is an annual percentage rate
finance charge of 16.5%. There may be other charges for some transactions. There are no late fees, but there will
be a charge for going over your credit limit.”
Which of the following statements is true?
a. The letter includes all the necessary disclosures for credit card solicitation under Regulation Z.
b. The finance charge is usurious.
c. The letter is missing several items of disclosure required under Regulation Z for credit card solicitation.
d. none of the above
131. Which of the following questions on a credit application violates the ECOA?
a. “List your place of employment.”
b. “Other sources of income – if you wish to have them considered in your credit evaluation.”
c. “Length of time in current residence.”
d. “Monthly child support income.”
132. Under CARD, the terms of the credit card must be:
a. sent to the customers.
b. printed on paper.
c. posted on the Internet.
d. all of the above.
133. Stan James carelessly left his wallet in the restroom of a gas station while on a business trip. He did not realize his
wallet was gone until eight hours later when he went to check into his hotel. Stan called the credit card companies
immediately, only to learn that the thief had charged $2000 on his American Express card, $450 on his MasterCard,
and $75 on his gas credit card. Stan James’ maximum liability on the cards is:
a. $0.
b. $50 per card.
c. $50.
d. none of the above
134. Which of the following questions is prohibited under the ECOA?
a. “Will your husband approve of you getting this credit card?”
b. “Are you now pregnant or are you planning to be?”
c. “We don’t count public assistance income.”
d. All of the above are ECOA violations.
135. Which of the following is not a violation of the ECOA?
a. requiring a husband’s signature when his wife applies for a credit card
b. requiring disclosure of pregnancy
c. requiring disclosure of length of time at current job
d. requiring disclosure of marital status
e. All of the above are violations of the ECOA.
136. Which of the following question(s) on a credit application would be a violation of the Equal Credit Opportunity Act?
a. “Do you plan on getting pregnant within the next two years?”
b. “Have you ever declared bankruptcy?”
c. “Have you ever been convicted of a crime?”
d. All of the above are violations.
137. Under CARD, colleges and universities must:
a. disclose financial relationships with the credit card companies.
b. provide debt counseling for students.
c. limit locations for student solicitation for credit cards.
d. do all of these.
138. List the federal laws regulating credit contracts and give a brief description of each.
139. Discuss what colleges and universities must do under CARD for their students.
140. What additional disclosures must be made in credit transactions in which the debtor’s home will serve as security
for the loan?
141. Using what you have learned about consumer credit, develop a credit application that would comply with all federal
statutes and regulations.
142. Which of the following contracts would have to have some form or writing or record to be enforced?
a. A contract for the sale of a painting for $1,000.
b. A contract for employment for nine months.
c. A contract for advertising a house for sale for $50.
d. All of the above contracts would need to be in writing to be enforceable.
143. S has made a valid offer to B.
a. True
b. False
144. The communication between S and B must be evidenced by a record if any rights related to the exchange can be
enforced.
a. True
b. False
Evaluate the following facts and then answer the next two questions.
Day 1 S sends a letter to B with the following: “I will sell you my Play Station 3 for $150.”
Day 2 B receives the letter and responds, “I will take the Play Station for $150, but include 3 games.”
145. S has made a valid offer to B.
a. True
b. False
146. B has made a valid acceptance.
a. True
b. False
147. S has made a valid revocation to B.
a. True
b. False
148. B has made a valid acceptance.
a. True
b. False
149. Which of the following is not part of the CARD provisions on transfer of credit card balances?
a. Limits on how quickly credit terms can be changed following the transfer.
b. Additional disclosures on transfer fees.
c. Limits on transfer fees.
d. Prohibitions on additional transfers by the card holder.
150. Stamps.com offers at–home postage and mailing for a monthly fee. Customers are able to carry a balance on their
accounts that allows them to mail packages and letters as long as there is a balance in their account. Stamps.com
has a button on its program that carries this logo, “To purchase postage, click here.” Following that click, another
window pops up that reads, “You are about to purchase postage. Once you click ‘Okay‘ below, you cannot change
this transaction.” Why does Stamps.com have the second pop-up button?
a. The pop–up button is simply a courtesy for its customers.
b. The pop-up button is necessary to show acceptance of the terms.
c. The pop–up button is required under the UCC.
d. The pop-up button is required under common law.
151. A bilateral contract is one in which one side promises to perform in exchange for the other side‘s actions.
a. True
b. False
152. Void and voidable contracts are one and the same.
a. True
b. False