TreatiseAnswer Book

Consumer Financial Services Answer Book (2017 Edition)

 by Richard E Gottlieb, Thomas M Hanson, Arthur B Axelson
 
 Copyright: 2017

 Product Details >> 

Product Details

  • ISBN Number: 9781402427282
  • Page Count: 1490
  • Number of Volumes: 1
  •  

    Written in a clear and accessible Q&A format, this book—fully updated through mid-2017 developments—provides practitioners with a core understanding of the laws governing consumer financial services, as well as the latest developments in the field, including CFPB enforcement, privacy and security of personal information and much more.

    This treatise includes detailed chapters on twenty-seven separate subjects including the Truth in Lending Act, the Fair Credit Reporting Act, the Equal Credit Opportunity Act, the Electronic Signatures in Global and National Commerce Act (ESIGN), the Telephone Consumer Protection Act, the consumer provisions of the Bankruptcy Code,  the Gramm Leach Bliley Act, the Fair Debt Collection Practices Act, and two chapters on the powers and enforcement activities of the Consumer Financial Protection Bureau.  There are also chapters covering auto finance, credit cards, military lending, and laws affecting mortgage lending and servicing, including individual chapters on licensing, securitization, the Real Estate Settlement Procedures Act, the Home Mortgage Disclosure Act, the Home Ownership and Equity Protection Act, mortgage servicing rules and foreclosure.

    This practical Q&A guide ensures that the reader has the absolute latest information on the laws and regulations impacting the industry and consumers today.
  Preface
  Table of Contents
Chapter 1: Consumer Loan Products and the Federal Regulation of Consumer Credit
  • : The Basics of Consumer Finance1-2
  • Q 1.1 : What is a consumer loan?1-2
    • Q 1.1.1 : What are the principal structures of consumer loan regulation?1-3
  • Q 1.2 : Who is a consumer?1-3
  • Q 1.3 : What is a loan?1-4
    • Q 1.3.1 : What is the difference between an unsecured and secured loan?1-4
    • Q 1.3.2 : What is the difference between open-end and closed-end credit?1-4
    • Q 1.3.3 : What is the difference between a loan and a retail installment sales contract?1-5
  • Q 1.4 : What is a security interest?1-5
  • Q 1.5 : What interest rates may be charged on consumer loans?1-6
  • Q 1.6 : May consumer contracts be in electronic or digital form?1-7
    • Q 1.6.1 : What is an electronic record?1-7
    • Q 1.6.2 : What is an electronic signature?1-7
    • Q 1.6.3 : Do UETA and ESIGN supersede state laws that require that consumer contracts be in writing?1-7
  • : Consumer Loan Products1-8
  • Q 1.7 : What are the basic types of consumer loan products?1-8
  • Q 1.8 : What is a personal loan?1-8
  • Q 1.9 : What is a “payday” loan?1-8
  • Q 1.10 : What is a “mortgage loan”?1-8
    • Q 1.10.1 : What is a mortgage?1-9
    • Q 1.10.2 : Are there differences between residential and non-residential mortgage loans?1-10
    • Q 1.10.3 : What is a mortgage lien?1-10
    • Q 1.10.4 : What is a mortgage note?1-10
    • Q 1.10.5 : What is an adjustable rate mortgage?1-11
    • Q 1.10.6 : What is a home equity line of credit?1-11
    • Q 1.10.7 : What is a reverse mortgage?1-11
  • Q 1.11 : What is a credit card plan?1-12
    • Q 1.11.1 : What is a credit card issuer?1-12
    • Q 1.11.2 : What is a credit card?1-12
    • Q 1.11.3 : What is a cardholder?1-12
  • Q 1.12 : What is a student (or “educational”) loan?1-13
    • Q 1.12.1 : How do student loan repayments vary from conventional personal loans?1-14
    • Q 1.12.2 : Is a student loan technically a “consumer loan”?1-14
  • : Sources of Consumer Credit1-15
  • Q 1.13 : Who provides credit to consumers?1-15
  • Q 1.14 : What is a bank?1-15
    • Q 1.14.1 : What is a bank holding company?1-15
  • Q 1.15 : What is a credit card bank?1-15
  • Q 1.16 : What is a non-depository institution?1-16
  • Q 1.17 : What is a credit union?1-16
  • Q 1.18 : What is a savings & loan association, and how does it differ from other depository institutions?1-16
  • Q 1.19 : What is an industrial loan company?1-16
    • Q 1.19.1 : Do any laws address the potential non-supervision of ILCs?1-17
  • Q 1.20 : What is a mortgage banker?1-17
    • Q 1.20.1 : Is a mortgage company also a bank?1-18
    • Q 1.20.2 : What is a mortgage broker?1-18
    • Q 1.20.3 : What is the difference between a mortgage banker and a mortgage broker?1-19
    • Q 1.20.4 : How does the Dodd-Frank Act affect the mortgage broker industry?1-19
  • Q 1.21 : What is a consumer finance company?1-19
    • Q 1.21.1 : What is an auto finance company?1-20
    • Q 1.21.2 : What is a captive auto finance company?1-20
  • Q 1.22 : What is a government-sponsored enterprise?1-20
    • Q 1.22.1 : What are Fannie Mae and Freddie Mac?1-20
    • Q 1.22.2 : Do Fannie Mae and Freddie Mac make loans directly to consumers?1-21
    • Q 1.22.3 : What is the role of the Federal Housing Finance Agency in the operations of Fannie Mae and Freddie Mac?1-21
    • Q 1.22.4 : Is there a government-sponsored entity for the Federal Housing Administration and Department of Veterans Affairs Home Loan Program for Veterans?1-21
    • Q 1.22.5 : Is there a government-sponsored entity for student loans?1-22
  • Q 1.23 : What is a loan servicer?1-22
    • Q 1.23.1 : What is a sub-servicer?1-22
  • Q 1.24 : Are retailers covered by consumer finance laws?1-22
  • : Federal Regulation of Consumer Lending1-23
  • : Federal Regulators1-24
  • Q 1.25 : What federal agencies regulate consumer lending?1-24
  • Q 1.26 : What is the Consumer Financial Protection Bureau?1-24
    • Q 1.26.1 : What statutes does the CFPB administer?1-24
    • Q 1.26.2 : What is the scope of the CFPB’s authority?1-25
    • Q 1.26.3 : Do CFPB rules preempt state law?1-26
    • Q 1.26.4 : Does CFPB authority extend beyond depository institutions?1-27
    • Q 1.26.5 : What consumer lending regulations are enforced by the CFPB?1-27
  • Q 1.27 : What authority remains with other federal agencies?1-28
    • Q 1.27.1 : What is the Office of the Comptroller of the Currency?1-29
    • Q 1.27.2 : What is the Federal Reserve?1-29
    • Q 1.27.3 : What is the Federal Deposit Insurance Corporation?1-29
    • Q 1.27.4 : What is the National Credit Union Administration?1-30
    • Q 1.27.5 : What happened to the authority of those agencies from whom authority has been transferred to the CFPB?1-30
  • : Federal Laws Governing Consumer Lending1-31
  • Q 1.28 : What is the Consumer Credit Protection Act?1-31
  • Q 1.29 : What federal laws apply to lenders at the time the loan is underwritten and made?1-31
  • Q 1.30 : What is the Truth in Lending Act?1-32
    • Q 1.30.1 : What is the scope of TILA?1-33
    • Q 1.30.2 : What federal regulations implement TILA?1-33
    • Q 1.30.3 : Are retail installment sales covered by TILA?1-34
    • Q 1.30.4 : Are there any state laws that supplement or supplant TILA?1-34
  • Q 1.31 : What is the Equal Credit Opportunity Act?1-34
    • Q 1.31.1 : What is the scope of ECOA?1-34
    • Q 1.31.2 : Who has regulatory authority over ECOA?1-35
    • Q 1.31.3 : What is “fair lending”?1-35
    • Q 1.31.4 : Does ECOA address issues other than fair lending?1-35
  • Q 1.32 : What is the Fair Credit Reporting Act?1-35
    • Q 1.32.1 : Who is covered by the FCRA?1-36
    • Q 1.32.2 : What is a consumer reporting agency?1-36
    • Q 1.32.3 : Who has regulatory authority over FCRA?1-36
    • Q 1.32.4 : What is the Fair and Accurate Credit Transactions Act (FACTA)?1-37
  • Q 1.33 : What is the FTC Holder Rule?1-37
    • Q 1.33.1 : Are there any exceptions to the FTC Holder Rule?1-38
    • Q 1.33.2 : Is an assignee or purchaser liable for disclosure errors that are not apparent on the face of the loan?1-38
  • Q 1.34 : What is the FTC Credit Practices Rule?1-38
    • Q 1.34.1 : What contract provisions are prohibited under the Credit Practices Rule?1-38
    • Q 1.34.2 : What restrictions apply to co-signers on credit contracts?1-39
    • Q 1.34.3 : Does the Credit Practices Rule address late charges?1-39
  • Q 1.35 : What is the Community Reinvestment Act?1-39
  • : Federal Laws Governing Mortgage Lending1-40
  • Q 1.36 : What is the Servicemembers Civil Relief Act?1-40
    • Q 1.36.1 : Who is eligible for SCRA protection?1-40
    • Q 1.36.2 : Does the SCRA provide relief against foreclosures?1-40
    • Q 1.36.3 : In the event of alleged violations of the SCRA, who is entitled to pursue claims?1-41
    • Q 1.36.4 : Does the Military Lending Act provide different protections from the SCRA?1-41
  • Q 1.37 : What federal laws specifically apply just to mortgage lending?1-42
  • Q 1.38 : What is the Mortgage Reform and Anti-Predatory Lending Act?1-42
    • Q 1.38.1 : When did the Mortgage Reform Act provisions take effect?1-43
  • Q 1.39 : What is the Homeowners Protection Act?1-43
    • Q 1.39.1 : What is private mortgage insurance?1-43
  • Q 1.40 : What is the Home Mortgage Disclosure Act?1-44
    • Q 1.40.1 : What federal regulations implement HMDA?1-44
  • Q 1.41 : What is the Real Estate Settlement Procedures Act?1-44
    • Q 1.41.1 : What federal regulations implement RESPA?1-45
    • Q 1.41.2 : Does RESPA require special disclosures for consumer credit transactions secured by real property?1-45
    • Q 1.41.3 : Does RESPA regulate appraisals?1-45
  • Q 1.42 : What are the Mortgage Servicing Rules?1-46
  • Q 1.43 : What is the SAFE Act?1-47
  • Q 1.44 : What is the Fair Housing Act?1-47
    • Q 1.44.1 : Does the CFPB have regulatory authority with respect to the Fair Housing Act?1-48
    • Q 1.44.2 : Which regulators investigate claims of mortgage discrimination?1-48
  • Q 1.45 : What is the Alternative Mortgage Transactions Parity Act?1-48
  • : Federal Laws Governing the Purchase or Lease of Motor Vehicles1-48
  • Q 1.46 : Does TILA apply to consumers that buy or lease a car or truck?1-48
  • Q 1.47 : What is the scope of the Consumer Leasing Act?1-49
    • Q 1.47.1 : What entities are covered by the Consumer Leasing Act?1-50
    • Q 1.47.2 : What federal regulations implement the Consumer Leasing Act?1-50
  • : Federal Laws Governing the Electronic Transfer of Funds1-50
  • Q 1.48 : What is the Electronic Fund Transfer Act?1-50
  • Q 1.49 : What federal regulations implement the EFTA?1-51
    • Q 1.49.1 : Does the CFPB also regulate money transfers to foreign countries?1-51
  • : Federal Laws Governing Credit Card Use1-51
  • Q 1.50 : Do TILA and Regulation Z apply to credit cards?1-51
  • Q 1.51 : What is the Credit Card Accountability, Responsibility and Disclosure Act of 2009?1-51
  • Q 1.52 : What is the Fair Credit Billing Act?1-52
  • Q 1.53 : What are PCI Standards?1-52
  • : State Regulation of Consumer Lending1-53
  • Q 1.54 : What state laws apply to consumer finance transactions?1-53
  • : Privacy Laws1-53
  • Q 1.55 : What laws govern the privacy of a consumer’s financial information?1-53
  • Q 1.56 : What is the Gramm-Leach-Bliley Act?1-54
    • Q 1.56.1 : What agency enforces the GLBA?1-54
  • Q 1.57 : What is the Right to Financial Privacy Act?1-54
  • Q 1.58 : What is the Red Flags Rule?1-55
  • Q 1.59 : What other federal statutes directly address consumer privacy issues?1-55
    • Q 1.59.1 : What is the TCPA?1-56
    • Q 1.59.2 : What is the TSR?1-56
    • Q 1.59.3 : What is does “DNC” mean?1-56
  • : Loan Obligation Delinquency1-57
  • Q 1.60 : At what point is a consumer in “default” on his or her loan obligation?1-57
    • Q 1.60.1 : What is acceleration?1-57
    • Q 1.60.2 : At what point may the lender foreclose on a mortgage or deed of trust?1-57
  • Q 1.61 : What federal laws apply to consumers who are delinquent or in default on their loan obligations?1-58
  • Q 1.62 : What is the Fair Debt Collection Practices Act?1-58
    • Q 1.62.1 : Was the FDCPA enacted strictly to benefit consumers?1-58
    • Q 1.62.2 : Is a loan servicer considered a third-party debt collector?1-59
    • Q 1.62.3 : Are there any regulations that supplement the FDCPA?1-59
  • Q 1.63 : What is the Credit Repair Organizations Act?1-60
    • Q 1.63.1 : Who enforces the CROA?1-60
Chapter 2: The Consumer Financial Protection Bureau
  • : Basics of the Consumer Financial Protection Bureau2-2
  • Q 2.1 : What is the Consumer Financial Protection Bureau?2-2
    • Q 2.1.1 : Does the Federal Reserve exercise any authority over the CFPB?2-3
    • Q 2.1.2 : How is the CFPB funded?2-3
  • Q 2.2 : Who leads the CFPB?2-4
  • : CFPB Functions and Objectives2-4
  • Q 2.3 : What are the CFPB’s functions and objectives relating to consumer financial affairs?2-4
  • Q 2.4 : Does the CFPB research and collect information from, and disseminate information to, consumers?2-5
    • Q 2.4.1 : How must the CFPB collect and track consumer complaints?2-5
    • Q 2.4.2 : For which products has the CFPB instituted complaint procedures and what is the complaint and response process?2-6
    • Q 2.4.3 : Do others have access to the CFPB’s Consumer Complaint Database?2-6
    • Q 2.4.4 : Is the CFPB collecting other data in addition to the Consumer Complaint Database?2-7
  • : Organization of the CFPB2-7
  • Q 2.5 : How is the CFPB organized?2-7
  • Q 2.6 : What offices is the CFPB required to establish to carry out its duties?2-8
    • Q 2.6.1 : What is the Office of Fair Lending and Equal Opportunity?2-9
    • Q 2.6.2 : What is the Office of Financial Education?2-10
    • Q 2.6.3 : What is the Office of Consumer Engagement (CE)?2-10
    • Q 2.6.4 : What is the Office of Servicemember Affairs?2-11
    • Q 2.6.5 : What is the Office for Older Americans?2-13
    • Q 2.6.6 : What is the CFPB’s Consumer Advisory Board?2-14
  • Q 2.7 : What other offices has the CFPB created?2-14
  • : Regulatory Powers2-15
  • Q 2.8 : How does the CFPB implement federal consumer financial laws and what is its rulemaking authority?2-15
    • Q 2.8.1 : What requirements are imposed upon the CFPB in connection with the rulemaking authority?2-16
    • Q 2.8.2 : May the CFPB require additional disclosures to consumers from covered persons and service providers?2-16
    • Q 2.8.3 : Have required mortgage loan disclosures changed?2-17
    • Q 2.8.4 : What other regulatory actions has the CFPB taken?2-17
    • Q 2.8.5 : What regulations has the CFPB issued regarding TILA’s Ability to Repay and the definition of Qualified Mortgage Loans?2-18
    • Q 2.8.6 : Has the CFPB issued new regulations regarding mortgage loan servicing?2-19
  • Q 2.9 : What is the CFPB’s rulemaking authority regarding unfair, deceptive, or abusive acts or practices?2-19
    • Q 2.9.1 : Is the CFPB restricted in regard to activities it deems to be unfair?2-20
    • Q 2.9.2 : What limitations are placed on the CFPB in determining that an act or practice is abusive?2-20
    • Q 2.9.3 : Does the Dodd-Frank Act help define deceptive acts or practices?2-21
    • Q 2.9.4 : Has the CFPB issued any guidance regarding unfair, deceptive or abusive acts or practices (UDAAPs)?2-21
    • Q 2.9.5 : What are the recent developments involving the CFPB’s use of its regulatory/rulemaking authority?2-23
  • : Supervisory Authority2-24
  • Q 2.10 : What entities fall within the scope of the CFPB’s supervisory authority?2-24
    • Q 2.10.1 : How is asset size determined for purposes of supervisory authority by the CFPB?2-25
    • Q 2.10.2 : Who is exempt from CFPB authority?2-26
    • Q 2.10.3 : Who are larger participants over whom the CFPB has supervisory authority?2-27
    • Q 2.10.4 : Has the CFPB expanded its supervisory authority over “larger participants”?2-27
    • Q 2.10.5 : What consumer debt collectors and consumer credit reporting agencies that qualify as “larger participants” are subject to the CFPB’s nonbank supervision program?2-28
    • Q 2.10.6 : What examination procedures does the CFPB follow in supervising “larger participants” in the consumer debt collection market?2-28
    • Q 2.10.7 : What credit reporting agencies that qualify as “larger participants” are subject to the CFPB’s nonbank supervision program?2-30
    • Q 2.10.8 : What examination procedures does the CFPB follow in supervising “larger participants” in the consumer reporting market?2-30
    • Q 2.10.9 : Does the CFPB’s supervisory authority extend to student loan servicers?2-31
    • Q 2.10.10 : Who is covered under the CFPB rule defining larger participants in the international money transfer market?2-32
    • Q 2.10.11 : What nonbank entities that qualify as larger participants are included in the automobile financing market?2-32
    • Q 2.10.12 : What examination procedures does the CFPB follow in supervising “larger participants” in the automobile financing market?2-33
    • Q 2.10.13 : Has the CFPB developed a procedure establishing supervisory authority over nonbank consumer financial services companies?2-34
    • Q 2.10.14 : What is the procedure for establishing supervisory authority over other nonbank consumer financial services companies?2-34
    • Q 2.10.15 : What is the procedure terminating supervisory authority over nonbank consumer financial services companies?2-36
  • Q 2.11 : What is the CFPB’s supervisory authority?2-36
    • Q 2.11.1 : In supervising nondepository institutions, what activities must the CFPB undertake?2-37
    • Q 2.11.2 : What is the scope of the CFPB’s supervisory activities over large and small banks?2-39
  • Q 2.12 : What action has the CFPB taken in regard to its supervisory responsibilities?2-40
    • Q 2.12.1 : What does the Supervision and Examination Manual for Mortgage Servicers contain?2-40
    • Q 2.12.2 : Does the Examination Manual address mortgage origination?2-42
    • Q 2.12.3 : What does the Examination Manual contain in regard to nonbanks and payday lending?2-43
    • Q 2.12.4 : Has the CFPB added examination procedures for other types of consumer transactions?2-43
    • Q 2.12.5 : What guidance has the CFPB provided regarding S.A.F.E. Act compliance and examinations?2-44
    • Q 2.12.6 : May a supervised entity appeal a supervisory finding?2-45
    • Q 2.12.7 : Are supervised entities required to self-report violations to the CFPB?2-46
  • Q 2.13 : Are large banks and nonbanks responsible for their third-party service providers?2-46
    • Q 2.13.1 : Has the CFPB issued any guidance regarding the supervision of third-party service providers?2-47
    • Q 2.13.2 : What enforcement actions can regulators take against financial institutions for failing to manage risks of service provider relationships?2-49
    • Q 2.13.3 : Are there differences between guidance offered by the CFPB and guidance offered by the OCC, FDIC, and FRB?2-50
    • Q 2.13.4 : What initial steps must a financial institution take to comply with regulator expectations regarding the use of service providers?2-51
  • : Enforcement Powers2-52
  • Q 2.14 : What is the scope of the CFPB’s enforcement authority?2-52
  • Q 2.15 : What enforcement action may the CFPB take?2-52
    • Q 2.15.1 : What is the scope of the CFPB’s investigation and administrative discovery authority?2-52
    • Q 2.15.2 : May the CFPB conduct hearings and adjudication proceedings?2-53
    • Q 2.15.3 : What is the CFPB’s litigation authority?2-53
    • Q 2.15.4 : What relief may be granted in an administrative proceeding or court action brought by the CFPB?2-53
    • Q 2.15.5 : Will the CFPB provide notice to the subject of an intended enforcement action prior to initiating such proceedings?2-54
  • Q 2.16 : Has the CFPB provided any guidance regarding how it enforces violations of the statutes and regulations under its jurisdiction?2-55
    • Q 2.16.1 : What guidance has the CFPB provided regarding fair lending enforcement?2-56
    • Q 2.16.2 : How has the CFPB been enforcing consumer financial laws?2-57
  • Q 2.17 : Has the CFPB coordinated its enforcement authority with the FTC?2-57
  • Q 2.18 : To what extent has the CFPB coordinated and shared information with state attorneys general?2-59
  • Q 2.19 : Is information provided to the CFPB in connection with supervisory examinations and enforcement actions confidential?2-60
  • Q 2.20 : Does privileged information provided to the CFPB retain its privileged status?2-61
    • Q 2.20.1 : Has the CFPB issued any guidance on this subject?2-61
    • Q 2.20.2 : Is the CFPB position on privilege consistent with federal law?2-62
  • Q 2.21 : May supervised financial institutions and other persons in possession of confidential supervisory information (CSI) of the CFPB disclose such information to third parties?2-63
Chapter 3: Fair Credit Reporting Act
  • : The Basics of the Fair Credit Reporting Act3-4
  • : Regulatory and Enforcement Authority3-4
  • Q 3.1 : Which agencies have regulatory and enforcement authority for FCRA?3-4
  • : Affected Parties3-5
  • Q 3.2 : Who is subject to FCRA?3-5
  • Q 3.3 : Who is a “consumer” under FCRA?3-5
  • Q 3.4 : Who is a “user” under FCRA?3-6
    • Q 3.4.1 : What are the obligations of “users” of consumer reports under FCRA?3-6
  • Q 3.5 : Who are “furnishers” under Regulation V?3-7
    • Q 3.5.1 : Are some entities that otherwise “furnish” information excluded from the Regulation V definition?3-7
    • Q 3.5.2 : What are the obligations of companies that furnish information to CRAs under FCRA?3-7
    • Q 3.5.3 : What requirements does FCRA impose for a furnisher to establish policies and procedures related to the information that it provides to CRAs?3-9
  • Q 3.6 : What is a “consumer reporting agency”?3-10
  • : Consumer Reports3-10
  • Q 3.7 : What is a “consumer report”?3-10
  • Q 3.8 : What is an “investigative consumer report”?3-11
  • : Permissible Purposes to Obtain and Use Consumer Reports3-12
  • Q 3.9 : What are the “permissible purposes” for a CRA to furnish, and a user to obtain or use, a consumer report?3-12
  • Q 3.10 : What certifications must a user make to the CRA before it may obtain a consumer report?3-13
  • : Prescreened Offers of Credit3-14
  • Q 3.11 : What is a prescreened offer of credit or insurance?3-14
  • Q 3.12 : What are the conditions for making prescreened offers of credit?3-14
    • Q 3.12.1 : What consumer information is contained in a CRA’s report provided as a result of a “prescreening”?3-15
  • Q 3.13 : What disclosures must be made in prescreened offers of credit?3-15
    • Q 3.13.1 : May consumers opt out of receiving firm offers of credit or insurance?3-16
  • : Medical Information3-18
  • Q 3.14 : May creditors obtain medical information for credit purposes?3-18
  • Q 3.15 : How does FCRA restrict a person who receives medical information from a CRA from using or sharing the information?3-18
  • : Investigative Consumer Reports3-19
  • Q 3.16 : What are a user’s obligations with respect to investigative consumer reports?3-19
  • Q 3.17 : Must a person who obtains a consumer report on an individual provide a copy of the report to the individual?3-20
  • : Information Sharing and Marketing3-20
  • Q 3.18 : May a company share financial information about consumers with affiliated and nonaffiliated companies?3-20
  • Q 3.19 : May a company use financial information about a customer of an affiliate in marketing?3-21
    • Q 3.19.1 : What is “eligibility information”?3-21
  • : Employers and Their Employees’ Credit Information3-21
  • Q 3.20 : Is an employer permitted to access its employees’ credit information?3-21
    • Q 3.20.1 : What special conditions apply for a person to procure a consumer report for employment purposes?3-22
    • Q 3.20.2 : What conditions must be met before a CRA may furnish a consumer report for employment purposes?3-22
    • Q 3.20.3 : What are an employer’s obligations to a job applicant or employee before it takes “adverse action”?3-23
  • : Identity Theft3-23
  • Q 3.21 : How does FCRA address identity theft issues?3-23
    • Q 3.21.1 : What are a fraud alert, an active duty alert, and an extended alert?3-23
    • Q 3.21.2 : What are the user’s responsibilities if a consumer’s consumer report contains an alert?3-24
    • Q 3.21.3 : What requirements apply to any business entity that has dealt with an alleged identity thief?3-24
    • Q 3.21.4 : What must a debit or credit card issuer do to address the risk of identity theft arising from a change of address notice?3-25
    • Q 3.21.5 : What requirements apply to information printed on debit or credit card receipts?3-26
    • Q 3.21.6 : What is an Identity Theft Prevention (“Red Flags”) program?3-27
    • Q 3.21.7 : What are the responsibilities of financial services companies with regard to disposal of consumer information?3-28
  • : Disclosures to Consumers3-29
  • : Adverse Action3-29
  • Q 3.22 : What is “adverse action”?3-29
  • Q 3.23 : What information must be provided to a consumer if adverse action is taken in connection with a consumer report?3-31
    • Q 3.23.1 : Is there a different rule for adverse action based on information obtained from third parties that are not CRAs?3-32
  • : Credit Score and Risk-Based Pricing Notices3-33
  • Q 3.24 : What are the disclosure obligations of a person who makes or arranges mortgage loans and uses a consumer credit score in connection with a request for credit by a consumer?3-33
  • Q 3.25 : Who must comply with the risk-based pricing notice requirement?3-34
  • Q 3.26 : Is there a particular form that must be used to provide risk-based pricing notices and exception notices?3-34
  • Q 3.27 : What content must be included in a risk-based pricing notice?3-35
  • Q 3.28 : When are risk-based pricing notices required?3-35
    • Q 3.28.1 : What is the Direct Comparison Method?3-36
    • Q 3.28.2 : What is the Credit Score Proxy Method?3-36
    • Q 3.28.3 : What is the Tiered Pricing Method?3-37
  • Q 3.29 : Are there any circumstances where a risk-based pricing notice is not required?3-37
  • Q 3.30 : What are “exception notices”?3-37
  • Q 3.31 : What are a person’s responsibilities under the risk-based pricing notice requirements when a credit score is not available?3-39
  • : Consumer Disputes3-40
  • Q 3.32 : How does a consumer dispute information in his or her consumer report?3-40
  • Q 3.33 : What are a CRA’s responsibilities if a consumer disputes information in that consumer’s file?3-40
    • Q 3.33.1 : What are the CRA’s responsibilities if it determines that the consumer dispute is lacking in merit?3-42
  • Q 3.34 : What are a furnisher’s responsibilities if a CRA notifies it that the consumer has disputed information reported by the furnisher to the CRA?3-42
  • Q 3.35 : What are a furnisher’s responsibilities if a consumer directly disputes (to such furnisher) any information reported by the furnisher to a CRA?3-44
    • Q 3.35.1 : Are there any circumstances where a reasonable investigation is not required?3-45
  • : Responsibilities of CRAs3-45
  • Q 3.36 : What obligations does FCRA impose on CRAs to maintain reasonable procedures to ensure compliance?3-45
  • Q 3.37 : How does FCRA limit the information that a CRA may report?3-46
  • : Penalties; Civil Remedies3-47
  • Q 3.38 : Is there a private right of action?3-47
    • Q 3.38.1 : Do consumers have a cause of action for violation of all requirements of FCRA?3-47
  • Q 3.39 : What are the statutory penalties for violating FCRA?3-48
Chapter 4: Truth in Lending Act
  • : The Basics of the Truth in Lending Act4-3
  • Q 4.1 : What is the Truth in Lending Act?4-3
  • Q 4.2 : What was the original purpose of TILA?4-3
  • Q 4.3 : What kinds of transactions are subject to TILA requirements?4-4
  • : Disclosures4-7
  • Q 4.4 : What disclosure requirements are mandated by TILA?4-7
  • : Closed-End Credit Transactions4-7
  • Q 4.5 : What is a “closed-end” credit transaction?4-7
  • Q 4.6 : What are the required disclosures for closed-end transactions?4-8
  • Q 4.7 : Must these disclosures be made in a specific manner?4-11
  • Q 4.8 : When are these disclosures required?4-12
  • Q 4.9 : Does the TRID Rule require special disclosures for consumer credit transactions secured by real property?4-13
  • Q 4.10 : What are the application-related disclosure requirements under the TRID Rule?4-14
    • Q 4.10.1 : What information must be provided in the Loan Estimate?4-15
    • Q 4.10.2 : What are the timing requirements for the Loan Estimate?4-17
    • Q 4.10.3 : May fees be imposed before the consumer receives the Loan Estimate and indicates an intent to proceed with the transaction?4-18
    • Q 4.10.4 : May fees disclosed on the Loan Estimate change at or before closing?4-18
    • Q 4.10.5 : May the creditor use a revised estimate of charges instead of the Loan Estimate originally provided?4-19
    • Q 4.10.6 : Who must provide the Loan Estimate?4-20
    • Q 4.10.7 : Must creditors provide an informational booklet for transactions subject to the TRID Rule?4-21
    • Q 4.10.8 : May a creditor provide a written estimate before issuing the Loan Estimate?4-21
    • Q 4.10.9 : May a creditor require verifying information before issuing the Loan Estimate?4-21
  • Q 4.11 : Is a new disclosure required prior to consummation for closed-end transactions secured by real property?4-22
    • Q 4.11.1 : What information must be included in the Closing Disclosure?4-22
    • Q 4.11.2 : What are the timing requirements for the Closing Disclosure?4-23
    • Q 4.11.3 : Must the actual charges for settlement services be imposed on the consumer?4-24
    • Q 4.11.4 : Who must provide the Closing Disclosure?4-25
    • Q 4.11.5 : Must the Closing Disclosure be provided to the seller?4-25
    • Q 4.11.6 : What must be done if a charge imposed on or paid by the consumer changes after consummation?4-25
    • Q 4.11.7 : What must be done if a clerical error is discovered after consummation?4-26
    • Q 4.11.8 : If the creditor charges more than allowed at consummation, can the error be corrected?4-26
  • Q 4.12 : What are the material disclosures?4-26
    • Q 4.12.1 : What are the finance charge disclosure requirements?4-27
  • Q 4.13 : Are there any post-consummation requirements under TILA?4-29
  • Q 4.14 : Does TILA require periodic statements for closed-end credit transactions?4-29
    • Q 4.14.1 : What must the periodic statements contain?4-30
    • Q 4.14.2 : Are there any exceptions to the periodic statement requirement?4-31
  • Q 4.15 : What post-consummation notices must be provided for adjustable rate mortgages?4-32
    • Q 4.15.1 : What notice must be provided as a result of an interest rate change?4-32
    • Q 4.15.2 : Are there any exceptions to the interest rate change notice?4-33
    • Q 4.15.3 : What notice is required if an interest rate change results in a payment change?4-33
    • Q 4.15.4 : Are there any exceptions to the payment change notice?4-34
  • Q 4.16 : What information must be provided when an escrow account is canceled?4-34
    • Q 4.16.1 : When must the Escrow Closing Notice be provided?4-35
  • Q 4.17 : Does TILA impose any requirements on how payments are processed?4-35
  • : Open-End Credit Transactions4-36
  • Q 4.18 : What must be disclosed for open-end credit transactions?4-36
  • Q 4.19 : What disclosures are required before opening an open-end account?4-36
  • Q 4.20 : What disclosures must be made at the end of each billing cycle?4-39
  • Q 4.21 : Must the disclosures be made in a certain manner?4-41
  • Q 4.22 : Are there special disclosures required for home-equity plans?4-41
  • : Home Ownership and Equity Protection Act4-42
  • Q 4.23 : What is the Home Ownership and Equity Protection Act?4-42
  • Q 4.24 : What is a high-cost home loan?4-42
  • Q 4.25 : What are the disclosure obligations for HOEPA loans?4-43
  • Q 4.26 : What restrictions does HOEPA impose on its loan terms?4-44
  • : Higher-Priced Mortgage Loans4-45
  • Q 4.27 : What is a “higher-priced mortgage loan”?4-45
  • Q 4.28 : What restrictions and requirements are imposed on higher-priced mortgage loans?4-46
  • : Appraiser Independence4-47
  • Q 4.29 : What is the scope of the valuation independence rule?4-47
  • Q 4.30 : What conduct is prohibited under the valuation independence rule?4-47
  • Q 4.31 : How must fee appraisers be compensated?4-49
    • Q 4.31.1 : What are “customary and reasonable” fees?4-49
  • : Loan Originator Qualifications, Compensation, and Restrictions4-50
  • Q 4.32 : What is a “loan originator”?4-50
  • Q 4.33 : What transactions are covered by the loan originator compensation rule?4-51
  • Q 4.34 : May loan originator compensation be based on loan terms?4-51
    • Q 4.34.1 : What is compensation under the rule?4-52
    • Q 4.34.2 : Are there exceptions to the prohibition against compensating loan originators based on loan terms?4-52
  • Q 4.35 : May a loan originator receive compensation from the creditor and the consumer on the same transaction?4-53
  • Q 4.36 : May a loan originator direct a consumer to a particular transaction that will result in greater compensation to the loan originator?4-53
    • Q 4.36.1 : Is there a safe harbor for the anti-steering rule?4-54
  • Q 4.37 : What are the loan originator qualification requirements under Regulation Z?4-54
    • Q 4.37.1 : Are there any identification requirements for loan originators?4-54
  • Q 4.38 : What restrictions apply to arbitration clauses, waivers, and the financing of credit insurance under Regulation Z?4-55
  • : Ability to Repay Rule and Qualified Mortgages4-55
  • Q 4.39 : What is the “ability to repay rule”?4-55
  • Q 4.40 : How may a creditor comply with ATR?4-55
  • Q 4.41 : What is the general ability-to-repay standard?4-56
    • Q 4.41.1 : Is the creditor’s acknowledgment of a successor-in-interest as obligor subject to the ATR rule?4-56
  • Q 4.42 : What protections does “qualified mortgage” status provide?4-57
    • Q 4.42.1 : What are the different types of “qualified mortgage”?4-57
  • Q 4.43 : How does ATR apply to refinancings?4-58
  • : Rescission4-59
  • Q 4.44 : What is rescission and when is it available?4-59
  • Q 4.45 : What loans may be rescinded?4-59
  • Q 4.46 : What type of disclosures are required for the right of rescission?4-59
  • Q 4.47 : When may a borrower rescind?4-60
  • Q 4.48 : How does a borrower rescind a transaction?4-62
  • Q 4.49 : What are the effects of rescission?4-63
  • : Enforcement4-64
  • Q 4.50 : How is TILA enforced?4-64
  • Q 4.51 : What are a borrower’s remedies for TILA violations?4-65
    • Q 4.51.1 : What are the statutory damages?4-65
    • Q 4.51.2 : May actual damages also be collected?4-66
    • Q 4.51.3 : May a borrower use TILA as a defense on a collection action?4-67
  • Q 4.52 : What is the statute of limitations for TILA claims?4-67
  • Q 4.53 : What are a lender’s other defenses?4-68
Chapter 5: Real Estate Settlement Procedures Act
  • : Overview of the Law5-3
  • Q 5.1 : Why was RESPA enacted?5-3
  • Q 5.2 : Does the CFPB have oversight over RESPA?5-3
  • Q 5.3 : Does RESPA preempt state laws?5-4
  • Q 5.4 : Does RESPA cover all real estate mortgage transactions?5-4
  • Q 5.5 : What loans are not subject to RESPA?5-5
  • : Disclosures5-7
  • : Generally5-7
  • Q 5.6 : What disclosures are required?5-7
  • Q 5.7 : What disclosure changes became effective on October 3, 2015?5-7
  • : Initial Disclosures5-8
  • Q 5.8 : What initial disclosures are required?5-8
  • Q 5.9 : What is the Special Information Booklet and when must it be provided?5-9
  • Q 5.10 : What is a Good Faith Estimate and when must it be provided?5-10
    • Q 5.10.1 : What fees may be charged prior to providing a GFE?5-11
    • Q 5.10.2 : To what extent is an originator bound by the charges listed in the GFE?5-11
    • Q 5.10.3 : May a lender cure a GFE violation?5-13
    • Q 5.10.4 : Does the GFE commit the loan originator to make the loan?5-13
  • Q 5.11 : What is an affiliated business arrangement disclosure and when is it provided?5-13
  • Q 5.12 : What is a homeownership counseling organization list and when must it be provided?5-15
    • Q 5.12.1 : What exemptions are available from the homeownership counseling organization list requirement?5-16
    • Q 5.12.2 : What particular information must be disclosed with the homeownership counseling organization list?5-16
  • : Settlement Disclosures5-17
  • Q 5.13 : What disclosures must be made in connection with settlement?5-17
  • Q 5.14 : What is the Uniform Settlement Statement?5-17
    • Q 5.14.1 : What are the settlement agent’s responsibilities?5-18
    • Q 5.14.2 : What are the lender’s record-keeping responsibilities?5-19
  • Q 5.15 : What is the Initial Escrow Account Statement?5-19
  • : Post-Closing Disclosures5-20
  • Q 5.16 : What disclosures must be made post-closing?5-20
  • : Prohibition on Fees5-20
  • Q 5.17 : What fees may be charged for preparing federal disclosures?5-20
  • : Prohibitions on Kickbacks and Unearned Fees5-20
  • Q 5.18 : What does section 8 of RESPA prohibit?5-20
    • Q 5.18.1 : What is a “settlement service”?5-22
    • Q 5.18.2 : What is a “referral”?5-23
    • Q 5.18.3 : What is a “thing of value”?5-23
    • Q 5.18.4 : What is an “unearned fee”?5-24
  • Q 5.19 : What is the RESPA section 8 “safe harbor”?5-25
  • Q 5.20 : Does RESPA permit any referral fees?5-27
  • : Title Companies5-30
  • Q 5.21 : What limitations are placed on the seller’s selection of a title company?5-30
  • : Escrow Accounts5-30
  • : Generally5-30
  • Q 5.22 : What does RESPA generally require with regard to escrow accounts?5-30
  • : Annual Escrow Account Statement5-32
  • Q 5.23 : What is an Annual Escrow Account Statement?5-32
  • Q 5.24 : What specific contents must be included in an Annual Escrow Account Disclosure Statement?5-33
  • Q 5.25 : Must an Annual Escrow Account Disclosure Statement be provided when the loan is in default, foreclosure, or bankruptcy?5-34
  • Q 5.26 : May the Annual Escrow Account Disclosure Statement be delivered with other materials?5-35
  • Q 5.27 : How may a servicer change the escrow account computation year?5-35
  • : Servicing Accounts5-35
  • Q 5.28 : What requirements apply to servicers’ payment of escrow account items?5-35
  • Q 5.29 : What treatment must be afforded to borrowers’ discretionary payments?5-37
  • Q 5.30 : What requirements apply to escrow accounts when servicing is transferred?5-37
  • : Mortgage Servicing5-38
  • : Applicability5-38
  • Q 5.31 : To which loans do the requirements and limitations of the Mortgage Servicing Rules apply?5-38
  • Q 5.32 : What exemptions from the Mortgage Servicing Rules are given to small servicers?5-39
    • Q 5.32.1 : Who qualifies as a small servicer?5-40
    • Q 5.32.2 : When may a servicer determine its qualification for a small servicer exemption?5-40
    • Q 5.32.3 : Does a servicer lose its small servicer status if it employs a subservicer?5-40
  • : General Disclosure Requirements5-41
  • Q 5.33 : What general requirements apply to disclosures required by the Mortgage Servicing Rules?5-41
  • Q 5.34 : What are a servicer’s disclosure obligations to a successor in interest?5-41
  • : Servicing Transfers5-42
  • Q 5.35 : What requirements apply to mortgage servicing transfers under the Mortgage Servicing Rules?5-42
  • Q 5.36 : What requirements apply to payments received after a mortgage servicing transfer?5-43
  • Q 5.37 : What disclosure requirements apply to transfers of mortgage servicing?5-43
    • Q 5.37.1 : What is a Servicing Disclosure Statement and when is it provided?5-43
    • Q 5.37.2 : What are notices of transfer of loan servicing and when are they required?5-44
  • : Escrow Accounts5-45
  • Q 5.38 : What requirements under the Mortgage Servicing Rules apply to escrow accounts?5-45
  • Q 5.39 : What requirements apply to a servicer’s payment of escrow items?5-45
  • Q 5.40 : What requirements apply to a servicer’s treatment of escrow balances after a mortgage loan is paid in full?5-46
  • : Error Resolution and Information Requests5-46
  • Q 5.41 : What error resolution and information request procedures are prescribed by the Mortgage Servicing Rules?5-46
  • Q 5.42 : What is a notice of error?5-46
  • Q 5.43 : What is an information request and what format and substance limitations apply?5-47
  • Q 5.44 : Is a servicer always required to respond?5-48
  • Q 5.45 : What must a servicer do in response to a valid notice of error?5-49
  • Q 5.46 : What if an error is found?5-50
  • Q 5.47 : Are there any exceptions to the notice of error requirements?5-50
  • Q 5.48 : Is there a time limit to conclude an investigation in connection with a notice of error?5-51
  • Q 5.49 : What if no error is found?5-52
  • Q 5.50 : What must a servicer do in response to a valid information request?5-52
  • Q 5.51 : What if the servicer does not maintain the information sought?5-53
  • Q 5.52 : Can a servicer charge a fee for a notice of error investigation or information request?5-53
  • : Force-Placed Insurance5-54
  • Q 5.53 : What general requirements apply with respect to force-placed insurance?5-54
  • Q 5.54 : What limitations apply to the amount of force-placed insurance charges that may be assessed to a borrower?5-55
  • Q 5.55 : What disclosure requirements are imposed in connection with the initial placement of force-placed insurance?5-55
  • Q 5.56 : What actions must a servicer take if it receives evidence of adequate borrower-purchased hazard insurance coverage when force-placed coverage is in place?5-58
  • Q 5.57 : What is required for a servicer to charge a borrower for renewing or replacing existing force-placed insurance?5-58
  • : Policies and Procedures5-60
  • Q 5.58 : What servicing policies and procedures must servicers develop?5-60
  • : Early Intervention and Continuity of Contact5-61
  • Q 5.59 : What is the early intervention requirement?5-61
  • Q 5.60 : What is the continuity of contact requirement?5-62
    • Q 5.60.1 : What is required under continuity of contact?5-63
    • Q 5.60.2 : What must servicer personnel provide to a delinquent borrower under the continuity of contact requirement?5-63
  • : Loss Mitigation5-64
  • Q 5.61 : What do the loss mitigation rules generally require?5-64
  • Q 5.62 : What are a servicer’s obligations to review loss mitigation applications for completeness?5-64
  • Q 5.63 : What if the loss mitigation application is incomplete?5-65
  • Q 5.64 : May a servicer evaluate an incomplete loss mitigation application to discharge its obligation to evaluate a complete loss mitigation application?5-65
  • Q 5.65 : What if the borrower submits a complete loss mitigation application?5-66
  • Q 5.66 : What if a servicer discovers additional information is needed to complete a loss mitigation application when the application previously was considered facially complete?5-67
  • Q 5.67 : How may a borrower appeal denial of a loss mitigation option?5-68
  • Q 5.68 : How do these rules impact the foreclosure process?5-68
  • Q 5.69 : Can a borrower privately enforce the loss mitigation procedures?5-70
  • Q 5.70 : Do these rules require a servicer to offer specific loss mitigation options?5-70
  • Q 5.71 : How does a servicing transfer affect a pending loss mitigation application?5-71
  • : Enforcement and Remedies5-71
  • Q 5.72 : How is RESPA enforced?5-71
  • Q 5.73 : What are the remedies available for violations of RESPA?5-71
  • Q 5.74 : What are the statute of limitations periods for claims under RESPA?5-74
Chapter 6: Fair Lending/Non-Discrimination
  • : The Basics6-3
  • Q 6.1 : What is Fair Lending?6-3
    • Q 6.1.2 : What are the principal federal statutes that address fair lending and non-discrimination in connection with consumer financial products?6-3
    • Q 6.1.3 : How does fair lending differ from responsible lending?6-4
    • Q 6.1.4 : How do the concepts of fair lending and responsible lending intersect?6-4
  • : Fair Housing Act6-5
  • : Basics of the Fair Housing Act6-5
  • Q 6.2 : What is the Fair Housing Act?6-5
    • Q 6.2.1 : What is prohibited by the FHA?6-5
    • Q 6.2.2 : Are disparate impact claims available under the FHA?6-9
    • Q 6.2.3 : Do other legal challenges to HUD’s disparate impact rule remain after Texas Department of Housing & Community Affairs v. Inclusive Communities Project, Inc.?6-12
    • Q 6.2.4 : What is the HUD disparate impact rule, and is its standard for establishing disparate impact liability still viable?6-13
  • : Self-Testing6-14
  • Q 6.3 : What is “self-testing” under the FHA?6-14
  • : FHA Enforcement6-15
  • Q 6.4 : What remedies are available under the FHA?6-15
  • Q 6.5 : What is the statute of limitations for FHA claims?6-16
  • : Equal Credit Opportunity Act6-16
  • : Basics of the Equal Credit Opportunity Act6-16
  • Q 6.6 : What transactions are subject to the Equal Credit Opportunity Act?6-16
  • Q 6.7 : What types of discrimination are prohibited by the ECOA?6-17
  • Q 6.8 : What types of discrimination claims may be made under ECOA?6-18
    • Q 6.8.1 : What must a plaintiff establish under the overt discrimination theory?6-18
    • Q 6.8.2 : What must a plaintiff establish under the disparate treatment theory?6-18
    • Q 6.8.3 : Has there been a final determination in the courts on whether disparate impact is a recognized theory of discrimination under ECOA?6-19
  • : Stages of a Loan Transaction6-20
  • : Advertising/Assistance to Prospective Applicants6-20
  • Q 6.9 : What are the ECOA rules regarding marketing and loan applications?6-20
  • : Taking Applications/Information Requests6-21
  • Q 6.10 : Are creditors prohibited from requesting certain types of information?6-21
  • Q 6.11 : Are there limitations on requesting information about a borrower’s spouse?6-21
  • Q 6.12 : What are the other limitations on requesting applicant information?6-22
  • : Evaluating Applications6-22
  • Q 6.13 : Are there ECOA limitations on evaluating applications?6-22
  • : Extending Credit6-23
  • Q 6.14 : What are the ECOA restrictions on extending credit?6-23
  • Q 6.15 : What is an adverse action?6-24
    • Q 6.15.1 : What disclosures pertaining to action taken on an application are required under the ECOA?6-24
  • Q 6.16 : What are the ECOA’s appraisal requirements?6-25
  • Q 6.17 : What government monitoring information must be requested of applicants for credit for the purchase or refinancing of a dwelling?6-25
  • Q 6.18 : When can a creditor collect protected information about an applicant?6-27
  • Q 6.19 : What are the ECOA’s record retention requirements?6-28
  • : Enforcement6-28
  • Q 6.20 : What remedies are available under the ECOA?6-28
  • Q 6.21 : What is the statute of limitations for ECOA claims?6-29
  • : Community Reinvestment Act6-31
  • Q 6.22 : What is the Community Reinvestment Act?6-31
  • Q 6.23 : How do CRA evaluation standards differ by asset size and business strategy?6-31
  • Q 6.24 : What is the CRA rating system and the criteria for rating?6-32
  • Q 6.25 : How is the assessment area determined under the CRA?6-33
  • Q 6.26 : What lending activities are eligible for CRA consideration?6-34
  • Q 6.27 : What investment activities are eligible for CRA consideration?6-34
  • Q 6.28 : What service activities are eligible for CRA consideration?6-34
  • Q 6.29 : What are the technical requirements under the CRA?6-35
  • Q 6.30 : Are there any penalties or rights of action under the CRA?6-36
  • : Home Mortgage Disclosure Act6-36
  • Q 6.31 : What is the Home Mortgage Disclosure Act?6-36
  • Q 6.32 : Who is covered under HMDA?6-37
  • Q 6.33 : What are the reporting obligations under the HMDA?6-37
  • Q 6.34 : What are the disclosure obligations under the HMDA?6-39
  • Q 6.35 : Are there any penalties or rights of action under HMDA?6-40
  • Q 6.36 : Are there any consequences from an HMDA report that contains discriminatory lending patterns?6-40
Chapter 7: Data Privacy and Security
  • : Overview of Federal Privacy and Security Laws7-2
  • Q 7.1 : What federal laws govern the privacy and security of financial information?7-2
  • : Regulatory Authority for Privacy and Security7-3
  • Q 7.2 : How is Regulatory Authority over the Primary Privacy and Security Laws Allocated?7-3
  • : Gramm-Leach-Bliley Act7-4
  • : Basics of the Gramm-Leach-Bliley Act Privacy Provisions7-4
  • Q 7.3 : What is the Gramm-Leach-Bliley Act?7-4
    • Q 7.3.1 : What privacy interest does GLBA protect?7-5
  • Q 7.4 : What is “nonpublic personal information”?7-5
  • Q 7.5 : What is a “financial institution” under GLBA?7-6
    • Q 7.5.1 : What does “significantly engaged in financial activities” mean, and why does it matter?7-6
  • Q 7.6 : What activities are restricted under GLBA privacy provisions?7-8
    • Q 7.6.1 : Are there instances when a financial institution may share nonpublic personal information without notice and a chance to opt-out?7-8
  • : Notices and Disclosures7-9
  • Q 7.7 : What notices or disclosures are required under GLBA?7-9
    • Q 7.7.1 : Do the disclosure requirements differ for “customers” versus “consumers”?7-11
    • Q 7.7.2 : What is the legal distinction between a customer and a consumer?7-11
    • Q 7.7.3 : What privacy notices are required for customers?7-12
    • Q 7.7.4 : Are there lesser privacy notice requirements for consumers?7-12
  • Q 7.8 : What information must be included in a privacy notice?7-13
  • Q 7.9 : How may an institution comply with the notice and opt-out requirements?7-14
  • Q 7.10 : Are there requirements for the delivery of privacy notices?7-15
  • Q 7.11 : What steps must a financial institution take under GLBA to safeguard customer information?7-15
  • Q 7.12 : Are there restrictions on the manner in which an institution disposes of consumer information?7-16
  • Q 7.13 : Are there requirements for financial institutions in addressing incidents of unauthorized access to customer information?7-17
  • Q 7.14 : Are there content requirements for customer notice of incidents of unauthorized access to personal information?7-18
  • : Enforcement7-19
  • Q 7.15 : How are privacy and security laws enforced?7-19
  • Q 7.16 : What types of privacy and security enforcement actions have regulators taken under GLBA and outside of GLBA?7-20
  • Q 7.17 : Is there a private right of action under GLBA?7-22
  • : Preemption7-23
  • Q 7.18 : Does GLBA supersede state laws?7-23
  • : Right to Financial Privacy Act7-23
  • Q 7.19 : What is the Right to Financial Privacy Act?7-23
    • Q 7.19.1 : Who must comply with the RFPA, and how?7-24
    • Q 7.19.2 : Who is protected by the RFPA?7-24
  • Q 7.20 : What are the restrictions on a financial institution’s release of a customer’s financial information and records?7-25
    • Q 7.20.1 : Under what circumstances may financial information be released to government agencies?7-25
    • Q 7.20.2 : How should a financial institution provide financial information when it is appropriate to do so?7-26
  • Q 7.21 : What penalties does a financial institution risk for violation of the RFPA?7-26
  • : Privacy and Security Under FCRA7-27
  • Q 7.22 : Does FCRA impose privacy requirements beyond those on consumer reports?7-27
  • : Identity Theft and the Red Flags Rule7-27
  • Q 7.23 : Are there any special rules governing identity theft?7-27
  • Q 7.24 : What is the “Red Flags Rule”?7-28
  • Q 7.25 : What is a “red flag”?7-28
  • Q 7.26 : What does the Red Flags Rule generally require?7-28
    • Q 7.26.1 : Who is a “creditor” under the Red Flags Rule?7-29
    • Q 7.26.2 : For Red Flags Rule purposes, what is a covered “financial institution”?7-31
    • Q 7.26.3 : What accounts are covered by the Red Flags Rule?7-31
  • : Identity Theft Prevention Program7-32
  • Q 7.27 : Are there requirements regarding the administration of the Identity Theft Prevention Program?7-32
  • Q 7.28 : What are the elements of an effective identity theft prevention program under the Red Flags Rule?7-32
    • Q 7.28.1 : How are Red Flags identified?7-33
    • Q 7.28.2 : What categories of Red Flags does the program need to address?7-33
    • Q 7.28.3 : How can Red Flags be detected?7-34
    • Q 7.28.4 : How should identity theft be mitigated?7-34
    • Q 7.28.5 : How often does the program need to be updated?7-35
  • : Enforcement7-35
  • Q 7.29 : What are the penalties for non-compliance with the Red Flags Rule?7-35
Chapter 8: Electronic Signatures and Records
  • : Introduction to the eCommerce Laws8-2
  • Q 8.1 : What is eCommerce?8-2
  • Q 8.2 : What are the primary laws that authorize the use of electronic records and signatures in consumer financial services transactions?8-2
    • Q 8.2.1 : What is an “electronic record”?8-3
    • Q 8.2.2 : What is an “electronic signature”?8-3
  • Q 8.3 : What states have enacted UETA?8-5
  • Q 8.4 : Do eCommerce Laws supersede laws that require contracts be in writing?8-5
    • Q 8.4.1 : What is a covered “transaction” for UETA purposes?8-5
    • Q 8.4.2 : What is a covered “transaction” for ESIGN purposes?8-6
  • Q 8.5 : How do the eCommerce Laws work together?8-7
  • Q 8.6 : Do the eCommerce Laws change existing laws and regulations that require written documents and traditional, handwritten signatures?8-8
  • : Exceptions to the eCommerce Laws8-9
  • Q 8.7 : What are the important exceptions to the eCommerce Laws?8-9
    • Q 8.7.1 : Even if a transaction is excluded by UETA, does UETA cover any aspect of an excluded transaction?8-10
    • Q 8.7.2 : How do ESIGN’s exclusions differ from UETA?8-11
  • : Guidance from Industry and Government Agencies8-11
  • Q 8.8 : Are there industry standards, or guidance from government agencies, that also affect the use of electronic records and signatures?8-11
    • Q 8.8.1 : What is SPeRS?8-12
    • Q 8.8.2 : Do the government-sponsored enterprises address eCommerce?8-12
    • Q 8.8.3 : Does HUD accept electronic signatures?8-13
    • Q 8.8.4 : Has the Consumer Financial Protection Bureau weighed in on eCommerce?8-14
    • Q 8.8.5 : Has the CFPB provided any guidance on making disclosures on a mobile device?8-14
    • Q 8.8.6 : Do IRS rules affect consumer financial transactions?8-15
    • Q 8.8.7 : May the Annual Privacy Notice required by Regulation P be delivered electronically?8-16
  • : Consent to Use Electronic Signatures and Records8-19
  • Q 8.9 : Must parties first agree to use electronic records and signatures instead of written documents and traditional signatures?8-19
    • Q 8.9.1 : May a party be forced to consent to the use of electronic records as a condition for doing business?8-19
    • Q 8.9.2 : Are there circumstances where no express consent is required?8-20
    • Q 8.9.3 : Are there any special rules for obtaining consent from consumers?8-20
    • Q 8.9.4 : What pre-consent disclosures must be made to consumers?8-21
  • : Delivering Electronic Records8-22
  • Q 8.10 : Are there specific rules governing the presentation of electronic records?8-22
    • Q 8.10.1 : Have courts provided any guidance on how webpage design can impact the enforceability of a contract?8-22
  • Q 8.11 : Are there specific rules governing retention of electronic records?8-24
    • Q 8.11.1 : Is there a retention rule that applies generally to all electronic records?8-24
    • Q 8.11.2 : Must the “original” of an electronic document be maintained?8-25
    • Q 8.11.3 : Must the electronic record be capable of being printed and/or stored?8-25
  • Q 8.12 : May a properly retained document be used as evidence in court proceedings?8-25
  • Q 8.13 : Are there any rules governing sending and receipt of electronic records?8-27
    • Q 8.13.1 : When is an electronic record deemed to be “sent”?8-28
    • Q 8.13.2 : How does one determine when there is “receipt” of an electronic record?8-28
    • Q 8.13.3 : Given that a party may access documents in any geographic location, how is it determined at which location an electronic record is deemed to have been sent or received?8-29
    • Q 8.13.4 : What happens if one of the parties is aware that the electronic record was not actually sent and/or received?8-29
    • Q 8.13.5 : If a state law specifically requires that a document be delivered in a different method than permitted by the eCommerce Laws, do the eCommerce Laws override such provision?8-30
  • : Electronic Notarization and Filing in Public Records8-31
  • Q 8.14 : May an electronic record be notarized?8-31
  • Q 8.15 : Must public agencies, such as county recorders, accept electronic records for filing and other purposes?8-32
  • : Special Rules for Specific Types of Electronic Records8-32
  • Q 8.16 : Are there special rules that permit an electronic record to serve as a negotiable promissory note?8-32
    • Q 8.16.1 : What are the conditions under which an electronic record may serve as a negotiable promissory note?8-33
    • Q 8.16.2 : What is a “transferable record”?8-33
    • Q 8.16.3 : How does a party establish that it is “in control” of an electronic transferable record?8-33
    • Q 8.16.4 : What rights does the holder of a transferable record possess?8-34
  • Q 8.17 : Are there special rules that permit an electronic record to serve as a security agreement covering personal property, and as the functional equivalent of chattel paper?8-35
    • Q 8.17.1 : What is an “authenticated electronic security agreement”?8-35
  • Q 8.18 : May a party “perfect” a security agreement that is in the form of a mere electronic record?8-36
    • Q 8.18.1 : Does the law recognize “electronic” chattel paper?8-36
    • Q 8.18.2 : How does a party assert “control” over electronic chattel paper?8-36
Chapter 9: Preemption
  • : Basics of Federal Preemption9-2
  • Q 9.1 : What is federal preemption?9-2
  • Q 9.2 : What are the different types of preemption?9-2
  • Q 9.3 : Has the doctrine of federal preemption been applied to banking and consumer financial services laws?9-3
  • Q 9.4 : What financial institutions are covered by federal preemption?9-4
  • : Federal Preemption After the Dodd-Frank Act9-5
  • Q 9.5 : Does the Dodd-Frank Act change the preemptive effect of national banking laws and regulations on state consumer financial laws?9-5
  • : Field Preemption After the Dodd-Frank Act9-6
  • Q 9.6 : Does the field preemption standard apply to national banks and federal savings associations following the Dodd-Frank Act?9-6
  • : Conflict Preemption After the Dodd-Frank Act9-7
  • Q 9.7 : Are operating subsidiaries of national banks and federal savings associations entitled to federal preemption protections under the NBA or HOLA following the Dodd-Frank Act?9-7
  • Q 9.8 : Did the Dodd-Frank Act change the conflict preemption standard for national banks (and now federal savings associations)?9-9
    • Q 9.8.1 : What is the conflict preemption standard for national banks and federal savings associations established by Barnett?9-10
  • Q 9.9 : Does the Dodd-Frank preemption standard apply retroactively to conduct that occurred prior to the effectiveness of that standard?9-12
  • : Express Preemption After the Dodd-Frank Act9-13
  • : Express Preemption by Act of Congress9-13
  • Q 9.10 : What federal statutes provide a basis for the preemption of state consumer financial services and banking laws?9-13
  • : State Laws Subject to Federal Preemption9-15
  • Q 9.11 : Are state laws governing interest rates preempted?9-15
  • Q 9.12 : What constitutes an “interest rate” under the Most Favored Lender/Interest Rate Exportation doctrines?9-15
  • Q 9.13 : How does the Dodd-Frank Act affect the Most Favored Lender/Interest Rate Exportation doctrines?9-16
  • : Express Preemption by Administrative Rulemaking9-18
  • Q 9.14 : What steps must the OCC take before rulemaking with respect to preemption of state law after the Dodd-Frank Act?9-18
  • Q 9.15 : What is the standard for judicial review of OCC’s preemption determinations under the Dodd-Frank Act?9-18
    • Q 9.15.1 : Has the OCC identified state laws that are preempted?9-19
    • Q 9.15.2 : What is the impact of the Dodd-Frank Act on the 2004 Preemption Rule?9-21
  • : Administrative Determinations That Federal Laws Preempt State Laws9-23
  • Q 9.16 : What state laws have the OCC declared to be preempted after the Dodd-Frank Act?9-23
  • Q 9.17 : What state laws have the OCC concluded are not preempted under the new Dodd-Frank standard?9-25
  • Q 9.18 : Are state consumer protection or Unfair and Deceptive Acts and Practices laws preempted under Dodd-Frank?9-26
  • : Preemption Under the Federal Arbitration Act9-28
  • Q 9.19 : What is the Federal Arbitration Act and how does it relate to preemption and consumer financial services?9-28
  • Q 9.20 : Does the FAA preempt state laws prohibiting class action waivers in arbitration provisions?9-28
Chapter 10: Consumer Automotive Finance Law
  • : The Basics of Consumer Automotive Finance10-3
  • Q 10.1 : What is “automotive finance”?10-3
    • Q 10.1.1 : What are the most common purchase and lease options available to consumers?10-3
    • Q 10.1.2 : What is “direct lending”?10-3
    • Q 10.1.3 : What is “indirect financing”?10-3
    • Q 10.1.4 : What is a captive finance company?10-4
    • Q 10.1.5 : What is floorplan financing?10-4
    • Q 10.1.6 : What is a sale out of trust (SOT)?10-4
  • : Regulation of Automotive Finance10-5
  • Q 10.2 : Who regulates the automotive finance industry?10-5
    • Q 10.2.1 : With respect to auto finance, what specific companies are supervised by the CFPB?10-5
    • Q 10.2.2 : How has the CFPB defined “larger participant” in the auto finance market?10-6
    • Q 10.2.3 : What is included in the definition of automobile finance transactions?10-6
    • Q 10.2.4 : How is “automobile” defined under the rule?10-6
    • Q 10.2.5 : How does the rule address Asset-Backed Securities?10-6
    • Q 10.2.6 : Are automotive dealers regulated by the CFPB?10-6
    • Q 10.2.7 : Does the FTC Credit Practices Rule apply to motor vehicle transactions?10-7
  • : Fair Lending in Automotive Finance10-7
  • Q 10.3 : What is fair lending?10-7
    • Q 10.3.1 : What areas of automotive finance are of particular interest from a fair lending perspective?10-8
    • Q 10.3.2 : What type(s) of discrimination does the CFPB focus on?10-8
    • Q 10.3.3 : Has the CFPB issued any guidance on fair lending with respect to automotive finance transactions?10-8
    • Q 10.3.4 : How Does the CFPB use BISG?10-9
  • Q 10.3.5 : How Does the CFPB determine race, ethnicity and gender using the BISG method?10-10
    • Q 10.3.6 : How Does the CFPB determine damages if they find disparities exist?10-10
    • Q 10.3.7 : How Does the CFPB expect automotive finance companies to manage fair lending risk?10-11
    • Q 10.3.8 : What is expected in terms of Board and Management oversight?10-11
    • Q 10.3.9 : What is the purpose and expectation regarding a compliance system?10-11
    • Q 10.3.10 : What is expected in terms of the complaint management system?10-12
    • Q 10.3.11 : What is expected of the compliance audit function?10-12
  • : Retail Installment Sales Contracts10-12
  • : Generally10-12
  • Q 10.4 : What is a retail installment sales contract?10-12
    • Q 10.4.1 : Who is the lender on an RISC?10-13
    • Q 10.4.2 : What is the FTC Holder Rule?10-13
    • Q 10.4.3 : What are the limits to the Holder Rule?10-15
  • : Laws Governing the Form and Content of RISCs10-15
  • Q 10.5 : What laws govern the form and content of RISCs?10-15
    • : Truth-in-Lending Act10-15
    • Q 10.5.1 : How does TILA apply to RISCs?10-15
    • Q 10.5.2 : What is the relationship between the Holder Rule and TILA?10-16
    • Q 10.5.3 : What is a “spot delivery agreement”?10-16
    • Q 10.5.4 : Does TILA apply to automotive advertising?10-18
    • : Prohibition of Discrimination10-18
    • Q 10.5.5 : Are there any laws prohibiting discrimination in auto finance transactions?10-18
    • : Fair Credit Reporting Act10-19
    • Q 10.5.6 : Does FCRA apply to automotive finance transactions?10-19
    • : Form and Content of RISCs10-20
    • Q 10.5.7 : What state laws regulate the form and content of RISCs?10-20
    • : Ability-to-Repay Principles Under State Law10-21
    • Q 10.5.8 : Do ability-to-repay principles apply to RISCs?10-21
    • : Uniform Consumer Credit Code10-22
    • Q 10.5.9 : What is the Uniform Consumer Credit Code and how does it apply?10-22
  • : Consumer Leasing of Motor Vehicles10-23
  • Q 10.6 : What are consumer leases of motor vehicles?10-23
    • Q 10.6.1 : Who are the parties to a consumer motor vehicle lease?10-24
    • Q 10.6.2 : Does the FTC Holder Rule apply to leases?10-24
  • Q 10.7 : What does the Federal Consumer Leasing Act require?10-24
    • Q 10.7.1 : What are the general disclosure requirements under the Consumer Leasing Act?10-25
    • Q 10.7.2 : What must be included in the Consumer Leasing Act disclosures?10-25
    • Q 10.7.3 : What if the transaction involves more than one lessor or lessee?10-27
    • Q 10.7.4 : What if the lease is renegotiated, extended, or assumed?10-28
    • Q 10.7.5 : Does the CLA regulate the amount of late fees that may be imposed on a lessee?10-28
    • Q 10.7.6 : What if state law is inconsistent with the CLA and Regulation M?10-28
    • Q 10.7.7 : What do the CLA and Regulation M advertising disclosures require?10-29
  • Q 10.8 : Do state laws regulate the form and content of consumer leases?10-29
  • : Ancillary Products10-32
  • : Generally10-32
  • Q 10.9 : What are ancillary products?10-32
    • Q 10.9.1 : Have regulators taken any position on ancillary products?10-32
  • : Vehicle Service Contract10-33
  • Q 10.10 : What is a Vehicle Service Contract?10-33
    • Q 10.10.1 : Do any state laws regulate VSCs?10-34
    • Q 10.10.2 : How are pre-paid maintenance plans different than VSCs?10-35
  • : Guaranteed Asset Protection (GAP)10-36
  • Q 10.11 : What is “GAP Insurance” or a “GAP waiver”?10-36
    • Q 10.11.1 : Does TILA require certain disclosures for GAP agreements?10-37
    • Q 10.11.2 : Do state laws regulate GAP agreements?10-38
  • : Consumer Credit Insurance10-39
  • Q 10.12 : What is consumer credit insurance?10-39
    • Q 10.12.1 : How do states regulate the sale of consumer credit insurance?10-40
  • : Federal Odometer Act10-41
  • Q 10.13 : What is the Federal Odometer Act?10-41
  • : Rules Relating to the Sale of Used Motor Vehicles10-41
  • Q 10.14 : What is the Federal Trade Commission’s “Used Car Rule”?10-41
    • Q 10.14.1 : How does the FTC define a “used car”?10-42
    • Q 10.14.2 : What is the Buyer’s Guide?10-42
    • Q 10.14.3 : What do the terms “full warranty” and “limited warranty” mean in the Buyer’s Guide?10-45
    • Q 10.14.4 : How does the Used Car Rule impact the use of window stickers?10-46
    • Q 10.14.5 : What are the penalties for noncompliance with the Used Car Rule?10-46
  • : Rules Relating to Termination of Consumer Automotive Finance Contracts10-47
  • Q 10.15 : What happens if the consumer pays off the contract early?10-47
    • Q 10.15.1 : Are consumers entitled to a refund of GAP agreement or credit insurance premiums if they pay off the RISC or lease early?10-47
    • Q 10.15.2 : What is the Rule of 78’s financing method?10-50
    • Q 10.15.3 : What is the actuarial financing method?10-51
  • Q 10.16 : May a lessor impose penalties or other charges for early termination of a consumer lease?10-51
  • : Repossessions10-52
  • Q 10.17 : What happens if a consumer defaults?10-52
    • Q 10.17.1 : May a creditor engage in “self-help” repossession?10-52
    • Q 10.17.2 : Are there any laws that regulate the procedure for “self-help” repossessions?10-53
  • Q 10.18 : What are the notice requirements for RISCs? Is the creditor required to give notice before repossessing the vehicle?10-54
    • Q 10.18.1 : Is the creditor required to give notice after repossession?10-54
    • Q 10.18.2 : Does UCC Article 9 allow a consumer to waive the right to receive notice of disposition of collateral?10-58
    • Q 10.18.3 : May a consumer redeem the vehicle before sale?10-58
    • Q 10.18.4 : How is a sale conducted?10-59
    • Q 10.18.5 : Are any post-sale notices required?10-59
    • Q 10.18.6 : What are the consequences of noncompliance with these provisions?10-60
  • Q 10.19 : What are the requirements for repossessions involving consumer leases?10-62
Chapter 11: Credit Cards
  • : Basics of Credit Cards11-2
  • Q 11.1 : What is a credit card?11-2
  • Q 11.2 : What is a debit card?11-3
  • Q 11.3 : What are some types of credit cards?11-3
  • Q 11.4 : Who are the parties involved in a credit card transaction?11-4
  • Q 11.5 : What is a credit card network?11-5
    • Q 11.5.1 : Do debit cards use the same networks as credit cards?11-5
  • Q 11.6 : What is a credit card issuer and who are they?11-5
  • Q 11.7 : What is a merchant-acquiring bank?11-6
  • Q 11.8 : What is the interchange fee?11-6
  • Q 11.9 : What is a credit card agreement?11-6
  • : Legal Framework11-7
  • Q 11.10 : Do state laws apply to credit cards?11-7
    • Q 11.10.1 : How do states regulate issuers?11-7
    • Q 11.10.2 : Do retail installment sales acts apply to issuers?11-7
  • Q 11.11 : May a bank “export” its home interest rate?11-8
    • Q 11.11.1 : May retailers or merchants “export” their home state’s interest rate?11-8
  • Q 11.12 : What industry standards affect credit cards?11-8
  • Q 11.13 : What are the principal federal laws that apply to credit cards?11-9
    • Q 11.13.1 : Does TILA apply to credit cards?11-9
    • Q 11.13.2 : Does FCRA apply to credit cards?11-9
    • Q 11.13.3 : Does ECOA apply to credit cards?11-9
  • Q 11.14 : Does the Bureau of Consumer Financial Protection regulate credit cards?11-10
    • Q 11.14.1 : Are issuers subject to the CFPB’s rulemaking and enforcement authority regarding unfair, deceptive, or abusive acts or practices?11-10
    • Q 11.14.2 : What constitutes unfair, deceptive, or abusive acts or practices?11-10
  • : Soliciting Accounts11-12
  • Q 11.15 : May an issuer send an unsolicited credit card?11-12
  • Q 11.16 : May an issuer obtain consumer information from credit reports in order to make offers of credit?11-12
  • Q 11.17 : May an issuer give college students gifts (such as Frisbees) to induce them to apply for credit cards?11-13
  • : Advertising to New and Existing Cardholders11-13
  • Q 11.18 : Do some advertising terms trigger additional disclosures?11-13
    • Q 11.18.1 : Must a radio or television advertisement include all the additional disclosures?11-14
    • Q 11.18.2 : Do minimum payment advertisements trigger additional disclosures?11-14
  • Q 11.19 : May an advertisement refer to a fixed rate as “fixed”?11-14
  • Q 11.20 : Are there special requirements for promotional rates and fees?11-15
  • Q 11.21 : Do special requirements apply to deferred interest offers?11-15
  • : Credit Card Applications11-16
  • Q 11.22 : Are there any required disclosures for credit card applications?11-16
    • Q 11.22.1 : Must issuers provide the required disclosures over the phone?11-18
    • Q 11.22.2 : Are the same disclosures required on a “take-one” application?11-18
  • Q 11.23 : What disclosures must be given when a consumer applies in person?11-20
  • : Underwriting11-20
  • Q 11.24 : May an issuer open an account based solely on credit score?11-20
  • Q 11.25 : Does the issuer have ECOA notice obligations if it denies a credit card application?11-22
  • Q 11.26 : Does the issuer have FCRA disclosure obligations if it denies a credit card application?11-22
  • Q 11.27 : Are there situations other than denial of credit when the issuer has ECOA and FCRA adverse action obligations?11-23
  • : The Credit Card Agreement and Account-Opening Requirements11-23
  • Q 11.28 : Is the issuer required to make disclosures before the consumer may use the account?11-23
  • Q 11.29 : What disclosures are required?11-24
  • Q 11.30 : Is the issuer required to make additional copies of the card agreement available to the cardholder?11-24
    • Q 11.30.1 : Is the issuer required to publicize the card agreement?11-24
  • Q 11.31 : Are there additional disclosure requirements for cash access or balance transfer checks?11-25
  • : Billing Statement Requirements11-26
  • Q 11.32 : Is an issuer required to send a billing statement?11-26
  • Q 11.33 : Is there a timing requirement for statements?11-26
  • Q 11.34 : Is there any content that must be in each billing statement?11-26
  • Q 11.35 : Is an issuer required to give a billing rights statement?11-27
  • : Identity Theft Prevention11-27
  • Q 11.36 : Are there specific identity theft protections that apply to issuers?11-27
  • Q 11.37 : Is it permissible to display the cardholder’s full credit card number on a receipt?11-27
  • : TILA Limits on Rates and Fees11-28
  • Q 11.38 : Must the disclosed Annual Percentage Rate be accurate?11-28
  • Q 11.39 : Are there limits on an issuer’s ability to increase rates and fees?11-28
    • Q 11.39.1 : May an issuer increase rates and fees at the end of a promotion?11-28
    • Q 11.39.2 : May an issuer increase an APR if it is a variable APR?11-28
    • Q 11.39.3 : May an issuer increase rates and fees via a change-in-terms notice?11-29
    • Q 11.39.4 : May an issuer increase rates on an existing balance after a severe delinquency?11-29
    • Q 11.39.5 : May an issuer increase rates and fees after a workout or temporary hardship arrangement ends?11-29
    • Q 11.39.6 : May an issuer increase rates and fees on an account that no longer qualifies for a Servicemembers Civil Relief Act exception?11-30
  • Q 11.40 : Are there dollar amount limits on late and other penalty fees?11-30
    • Q 11.40.1 : Are there additional restrictions on over-the-limit fees?11-31
    • Q 11.40.2 : Are there any over-the-limit practices that are prohibited entirely?11-31
  • Q 11.41 : Is there a maximum on the total amount of fees that an issuer may charge during the first year an account is open?11-32
  • : Changes in Terms and Renewals11-33
  • Q 11.42 : Is advance notice required before a significant change?11-33
  • Q 11.43 : Does the issuer have ECOA or FCRA “adverse action” disclosure requirements?11-33
  • Q 11.44 : May the consumer reject the new terms?11-34
  • Q 11.45 : If a consumer rejects a change, may the issuer make the consumer repay the entire balance immediately?11-34
  • Q 11.46 : Is notice required if an issuer decreases a credit limit?11-34
  • Q 11.47 : Is notice required if the consumer agrees to a change?11-35
  • Q 11.48 : Does an issuer need to notify a consumer when it makes a change that is not considered significant?11-35
  • Q 11.49 : Are disclosures required at card renewal?11-35
  • Q 11.50 : Are disclosures required when an issuer increases rates due to delinquency or default, or as a penalty?11-36
  • Q 11.51 : Are there limits on an issuer’s right to terminate an account?11-36
  • Q 11.52 : Must the issuer periodically reevaluate its rate increases?11-37
    • Q 11.52.1 : When does the rate review requirement end?11-37
    • Q 11.52.2 : Must an issuer reevaluate rates for acquired accounts?11-37
  • : Accounting11-38
  • Q 11.53 : Are there timing rules for crediting payments?11-38
  • Q 11.54 : Are pay-by-phone fees permitted?11-38
  • Q 11.55 : Is an issuer permitted to allocate payments to low interest rate balances first?11-38
  • Q 11.56 : Is a credit required to refund a credit balance?11-39
  • : Billing Disputes and Unauthorized Use11-39
  • Q 11.57 : Are issuers required to address billing errors?11-39
  • Q 11.58 : May an issuer offset credit card balances against funds held in the consumer’s bank account?11-40
  • Q 11.59 : What is the extent of a cardholder’s liability for unauthorized use of a credit card?11-40
  • Q 11.60 : May a cardholder assert claims or defenses against an issuer arising out of a billing dispute?11-41
Chapter 12: Fair Credit Billing Act
  • : Basics of the Fair Credit Billing Act of 197412-2
  • Q 12.1 : What is the Fair Credit Billing Act?12-2
  • Q 12.2 : What is the FCBA’s purpose?12-2
  • Q 12.3 : Who is a “creditor” and what is an “open-end credit plan” under the FCBA?12-3
    • Q 12.3.1 : What is an “extension of consumer credit”?12-4
  • : Dispute Resolution12-5
  • Q 12.4 : How does the FCBA regulate dispute resolution procedures in connection with consumer credit?12-5
    • Q 12.4.1 : Does the FCBA’s billing error procedures apply only to open-end credit?12-5
  • Q 12.5 : What is a billing error under the FCBA?12-6
    • Q 12.5.1 : What types of errors are not “billing errors” within the meaning of the FCBA?12-7
  • Q 12.6 : How must a cardholder notify a creditor of a billing error?12-7
  • Q 12.7 : What are the creditor’s obligations after receiving a billing error notice?12-9
  • Q 12.8 : Is the creditor required to investigate the billing error?12-10
  • Q 12.9 : What is a “reasonable investigation”?12-10
  • Q 12.10 : What restrictions apply when a billing error is pending?12-12
  • : Regulation, Supervision, and Enforcement12-12
  • Q 12.11 : What agency is responsible for promulgating rules, supervising and enforcing the FCBA?12-12
  • Q 12.12 : What is the penalty for non-compliance with the FCBA?12-13
  • Q 12.13 : Is there a private right of action under the FCBA?12-13
  • : Creditor Obligations12-14
  • Q 12.14 : What are the creditor’s obligations regarding billing periods and payments under the FCBA?12-14
  • Q 12.15 : What are the creditor’s obligations regarding limits on interest rates, fees, and finance charge increases applicable to outstanding balances?12-15
  • : Sellers12-17
  • Q 12.16 : What rights and obligations do sellers have under the FCBA?12-17
  • Q 12.17 : Is the card issuer subject to the cardholder’s claims and defenses against a seller?12-17
  • : Cardholder Indebtedness12-18
  • Q 12.18 : May a card issuer offset the cardholder’s indebtedness against funds held on deposit with the card issuer?12-18
  • : Preemption12-19
  • Q 12.19 : Does the FCBA preempt state law?12-19
Chapter 13: Telemarketing and the Telephone Consumer Protection Act
  • : Overview of Federal Telemarketing Laws13-2
  • Q 13.1 : What federal laws and rules govern telemarketing?13-2
  • Q 13.2 : Who regulates telemarketing?13-2
  • Q 13.3 : Do states likewise regulate telemarketing?13-3
  • Q 13.4 : What are some of the similarities between the TCPA and the TSR?13-3
  • Q 13.5 : What are some of the basic differences between the TCPA and the TSR?13-4
  • : TCPA Scope and Core Definitions13-5
  • Q 13.6 : What is the TCPA?13-5
    • Q 13.6.1 : What constitutes advertising for TCPA purposes?13-5
    • Q 13.6.2 : What is telemarketing?13-6
  • : Application of TCPA13-6
  • Q 13.7 : What conduct does the TCPA prohibit?13-6
    • Q 13.7.1 : Who is considered a called party?13-7
    • Q 13.7.2 : What is an established business relationship?13-7
    • Q 13.7.3 : Are short message service (SMS) text messages to cell phones considered “calls” under the TCPA?13-7
  • Q 13.8 : Does the TCPA apply to debt collection calls?13-7
    • Q 13.8.1 : What is an autodialed call?13-8
  • Q 13.9 : Are any types of telephone solicitation exempted?13-8
  • Q 13.10 : Are any other calls or messages exempt from the TCPA?13-8
  • : ATDS and Prerecorded Call Prohibitions13-9
  • Q 13.11 : What prohibitions apply specifically to calls using an automated telephone dialing system and prerecorded messages?13-9
    • Q 13.11.1 : What is an “automatic telephone dialing system”?13-9
    • Q 13.11.2 : Are predictive dialers included in the definition of “automatic telephone dialing system”?13-10
    • Q 13.11.3 : What specific restrictions apply to permitted auto-dialed calls with artificial or prerecorded messages?13-10
  • Q 13.12 : Is there an “established business relationship” (EBR) exemption for prerecorded telemarketing calls to residential landlines?13-11
  • : Other TCPA Restrictions13-11
  • Q 13.13 : May a telemarketer conceal the source of the call?13-11
  • Q 13.14 : Is it permissible to send an unsolicited fax?13-11
    • Q 13.14.1 : Who is a “sender” of a facsimile under the TCPA?13-11
  • Q 13.15 : What is a compliant fax opt-out notice?13-12
  • : Consent and Revocation13-12
  • Q 13.16 : What type of consent is required to call or text consumers on their mobile phones with a telemarketing offer?13-12
    • Q 13.16.1 : May consent be provided electronically?13-13
    • Q 13.16.2 : Does providing a telephone number at which the called party may be reached satisfy the express written consent requirement?13-13
    • Q 13.16.3 : What if the consent to receive a call is attached to a cellular phone number that is reassigned to a third party?13-13
    • Q 13.16.4 : Are there any recordkeeping requirements for consents?13-14
  • Q 13.17 : Who bears the burden of establishing consent?13-14
  • Q 13.18 : Are there any exceptions for one-time text messages sent in response to a consumer’s request?13-14
  • Q 13.19 : Are consumers permitted to revoke consent?13-15
  • : TCPA Enforcement and Remedies13-16
  • Q 13.20 : What regulators may enforce the TCPA?13-16
  • Q 13.21 : Is there a private right of action under the TCPA?13-16
  • Q 13.22 : What are the penalties for failing to comply with the TCPA?13-16
    • Q 13.22.1 : What constitutes a “knowing and willful” violation of the TCPA?13-17
  • Q 13.23 : May an employee or officer of the entity placing the prohibited call be held personally liable under the TCPA?13-17
  • Q 13.24 : May a defendant be held vicariously liable under the TCPA?13-17
  • Q 13.25 : Are there any defenses to a violation?13-18
  • Q 13.26 : Does general liability insurance provide coverage for TCPA claims?13-18
  • Q 13.27 : Are TCPA claims arbitrable?13-18
  • Q 13.28 : What is the statute of limitations for TCPA claims?13-18
  • Q 13.29 : Are class actions permitted?13-19
  • Q 13.30 : Have there been any significant class action settlements?13-19
  • Q 13.31 : Does the TCPA preempt state law?13-19
  • Q 13.32 : Given its extraordinarily broad reach, is the TCPA constitutional?13-20
  • Q 13.33 : Do TCPA violations cause “concrete harm” such that a plaintiff has Article III standing to sue?13-20
  • Q 13.34 : May a defendant moot a plaintiff’s claim merely by making a Rule 68 offer of judgment?13-21
  • : Telemarketing Sales Rule13-22
  • Q 13.35 : What is the TSR?13-22
  • Q 13.36 : What is “telemarketing” for purposes of the TSR?13-22
  • Q 13.37 : Are all telemarketers covered?13-22
  • Q 13.38 : Are persons who merely assist sellers or telemarketers also covered?13-23
  • Q 13.39 : What entities are excluded from the TSR?13-23
  • Q 13.40 : What information must sellers and telemarketers disclose?13-23
  • Q 13.41 : When must “material information” be given to consumers?13-24
  • Q 13.42 : Does the TSR require telemarketers to disclose the total cost of any purchase?13-24
  • Q 13.43 : Does the TSR prohibit any payment methods obtained over the phone?13-24
  • Q 13.44 : What is a negative option feature?13-25
    • Q 13.44.1 : What disclosures must be made about these features?13-25
  • Q 13.45 : How must material restrictions, limitations or conditions be disclosed?13-26
  • Q 13.46 : Are there disclosure rules regarding refund policies?13-26
  • Q 13.47 : What disclosures must be made for credit card loss protection plans?13-27
  • : Charging Customers Using Preacquired Account Information13-27
  • Q 13.48 : What is preacquired account information?13-27
  • Q 13.49 : What requirements apply to using preacquired information when there is a free-to-pay offer?13-28
  • : Enforcement of the TSR13-28
  • Q 13.50 : Who may enforce the TSR?13-28
  • Q 13.51 : Have there been any significant TSR enforcement actions?13-29
  • : Do-Not-Call Registry13-30
  • Q 13.52 : What are the Do-Not-Call provisions?13-30
  • Q 13.53 : What calls are covered by the DNC provisions?13-30
  • Q 13.54 : Are any types of calls excluded from the national DNC provisions?13-31
  • Q 13.55 : Who may access the National DNC Registry?13-31
  • Q 13.56 : How is the National DNC Registry accessed and what information is available?13-31
  • Q 13.57 : May the National DNC Registry be used for any purpose other than preventing telemarketing calls?13-32
  • Q 13.58 : How often must sellers and telemarketers update their call lists?13-32
  • Q 13.59 : Are there entity-specific DNC provisions?13-32
  • Q 13.60 : Are separate divisions of a company considered a single “seller” or “telemarketer” for purposes of the Internal DNC Lists?13-33
  • Q 13.61 : Does the TCPA also restrict contact with a consumer who has registered his or her name on the National Registry or made a DNC request to the company?13-33
    • Q 13.61.1 : What are the entity-specific DNC provisions?13-33
    • Q 13.61.2 : Does the TCPA have a safe harbor provision?13-34
  • : Exceptions to Calling Persons on the National Registry13-34
  • Q 13.62 : What is the EBR exception?13-34
  • Q 13.63 : What is the “express agreement” exception?13-35
  • Q 13.64 : Are charities and tax-exempt organizations bound by these provisions?13-35
  • : DNC Enforcement and Remedies13-36
  • Q 13.65 : Who may enforce the DNC rules?13-36
  • Q 13.66 : Have there been any significant enforcement actions?13-36
Chapter 14: Electronic Fund Transfer Act and Regulation E
  • : Basics of the Electronic Fund Transfer Act14-2
  • Q 14.1 : What is the Electronic Fund Transfer Act and what is its purpose?14-2
  • Q 14.2 : Which financial institutions are covered by the EFTA?14-3
  • Q 14.3 : What is an electronic fund transfer?14-3
  • Q 14.4 : What is an account for purposes of the EFTA?14-3
  • Q 14.5 : What is an access device?14-4
    • Q 14.5.1 : Under what circumstances can an access device be issued?14-4
  • Q 14.6 : Are financial institutions and others subject to administrative enforcement under the EFTA?14-5
  • : Preauthorized Electronic Fund Transfers14-5
  • Q 14.7 : What is a preauthorized electronic fund transfer and are they regulated by the EFTA?14-5
  • Q 14.8 : How can a consumer initiate preauthorized EFTs?14-6
  • Q 14.9 : What notices are required by the financial institution in connection with a preauthorized EFT?14-7
  • Q 14.10 : Can a consumer stop payment of a preauthorized EFT?14-8
  • Q 14.11 : When must a preauthorized EFT be credited?14-8
  • Q 14.12 : Can a lender require that loan payments be made using preauthorized EFTs?14-8
  • : Unauthorized EFTs14-9
  • Q 14.13 : To what degree are the consumer and the financial institution liable for unauthorized EFTs?14-9
  • Q 14.14 : What is an unauthorized EFT?14-9
  • Q 14.15 : What is a consumer’s liability for an unauthorized EFT?14-9
    • Q 14.15.1 : What is a consumer’s liability upon loss or theft of an access device?14-10
    • Q 14.15.2 : What is a consumer’s liability for unauthorized EFTs appearing on a periodic statement?14-10
    • Q 14.15.3 : How must a consumer notify the financial institution?14-11
  • : Errors14-11
  • Q 14.16 : Are there procedures that a financial institution must follow to resolve errors?14-11
  • Q 14.17 : What is an error for purposes of the EFTA and Regulation E?14-11
  • Q 14.18 : What must a consumer’s notice contain in order to trigger the error resolution procedures?14-12
  • Q 14.19 : What are the financial institution’s responsibilities regarding notice of an error?14-13
  • : Disclosures14-15
  • Q 14.20 : Does the EFTA require any disclosures to consumers?14-15
  • Q 14.21 : What are the initial disclosure requirements?14-16
  • Q 14.22 : What are the periodic statement requirements under the EFTA?14-18
  • Q 14.23 : What is an error resolution notice and when must it be provided?14-19
  • Q 14.24 : What is required if a financial institution changes any of the terms disclosed in the initial disclosure?14-19
  • Q 14.25 : What does the EFTA require in connection with EFTs at electronic terminals?14-20
  • Q 14.26 : Are disclosure requirements imposed on operators of ATMs?14-21
  • : Overdraft Services14-21
  • Q 14.27 : Does the EFTA impose restrictions on overdraft services?14-21
  • Q 14.28 : What is an overdraft service?14-22
  • Q 14.29 : When may a financial institution impose a fee in connection with an overdraft service?14-22
  • Q 14.30 : Are there additional rules regarding the consumer’s right to opt in to an overdraft service?14-24
  • : Gift Cards, Gift Certificates, and Similar Prepaid Devices14-24
  • Q 14.31 : Are gift cards, gift certificates, or similar prepaid devices regulated by the EFTA?14-24
  • Q 14.32 : What types of gift or prepaid devices are regulated under the EFTA?14-24
    • Q 14.32.1 : What is a gift certificate?14-25
    • Q 14.32.2 : What is a gift card?14-25
    • Q 14.32.3 : What is a general-use prepaid card?14-25
    • Q 14.32.4 : What is a loyalty, award, or promotional gift card?14-25
  • Q 14.33 : Are disclosures required in connection with these devices?14-26
    • Q 14.33.1 : What disclosures must be made prior to purchase?14-27
    • Q 14.33.2 : What disclosures must be made on the certificate or card?14-28
  • Q 14.34 : What are the restrictions on the imposition of fees in connection with these devices?14-29
  • Q 14.35 : Can a gift certificate or card have an expiration date?14-30
  • : Payroll Card Accounts14-31
  • Q 14.36 : Does the EFTA regulate financial institutions offering payroll card accounts?14-31
  • Q 14.37 : What is a payroll card account?14-31
  • Q 14.38 : Must the financial institution provide the same disclosures with regard to payroll card accounts as it does for other EFTs?14-31
  • Q 14.39 : Are the liability provisions for payroll card accounts the same as for other EFTs?14-33
  • Q 14.40 : Have the error resolution procedures been modified for payroll card accounts?14-34
  • : Prepaid Accounts14-35
  • Q 14.41 : What is a prepaid account? (Effective October 1, 2017)14-35
  • Q 14.42 : What disclosures must be provided before a consumer acquires a prepaid account? (Effective October 1, 2017)14-36
  • Q 14.43 : What disclosures must be provided regarding a consumer’s prepaid account information? (Effective October 1, 2017)14-36
  • Q 14.44 : Are the liability provisions for prepaid accounts the same as for other EFTs? (Effective October 1, 2017)14-39
  • Q 14.45 : Have the error resolution procedures been modified for prepaid accounts? (Effective October 1, 2017)14-39
  • Q 14.46 : Are there any separate requirements pertaining to hybrid prepaid credit cards? (Effective October 1, 2017)14-40
  • Q 14.47 : Are there any requirements to submit prepaid account agreements to the Bureau and to post copies of the prepaid account agreements online? (Effective October 1, 2017; except for 12 C.F.R. § 1005.19(b), which is effective October 1, 2018)14-41
  • : Remittance Transfers14-41
  • Q 14.48 : What is a remittance transfer?14-42
  • Q 14.49 : What must be disclosed in connection with a remittance transfer?14-42
    • Q 14.49.1 : What must a pre-payment disclosure contain?14-42
    • Q 14.49.2 : What must be contained in the receipt?14-43
    • Q 14.49.3 : May the pre-payment disclosure and receipt be combined?14-45
    • Q 14.49.4 : What information must the error resolution and cancellation notice contain?14-45
  • Q 14.50 : Are there procedures that a remittance transfer provider must follow to resolve errors?14-46
    • Q 14.50.1 : What is an error in regard to remittance transfers?14-46
    • Q 14.50.2 : What type of notice triggers the error resolution procedures?14-48
    • Q 14.50.3 : What actions must a remittance transfer provider take upon receiving a notice of an error?14-49
  • Q 14.51 : May a sender cancel a remittance transfer and obtain a refund?14-50
  • Q 14.52 : May a sender schedule a remittance transfer in advance of the date of transfer?14-51
    • Q 14.52.1 : What initial disclosures are required for transfers scheduled in advance?14-52
    • Q 14.52.2 : What disclosures are required in regard to each subsequent preauthorized remittance transfer?14-52
  • : Civil Liability/Enforcement14-53
  • Q 14.53 : Is there a private right of action for EFTA violations?14-53
  • Q 14.54 : What defenses are available to financial institutions?14-53
  • Q 14.55 : May the EFTA be enforced by regulatory agencies?14-55
Chapter 15: Servicemembers Civil Relief Act & Military Lending Act
  • : SCRA Basics15-3
  • Q 15.1 : What is the SCRA?15-3
  • Q 15.2 : Are there any state law versions of the SCRA?15-4
  • Q 15.3 : Who is protected by the SCRA?15-4
  • Q 15.4 : Which members of the full-time federal Military are eligible for SCRA protection?15-5
  • Q 15.5 : Which members of the Military reserves are eligible for SCRA protection?15-5
  • Q 15.6 : Which members of the National Guard are eligible for SCRA protection?15-5
  • Q 15.7 : Which members of NOAA or PHS are eligible for SCRA protection?15-7
  • Q 15.8 : Are U.S. citizens in the military service of other countries eligible for SCRA protection?15-7
  • Q 15.9 : Who is not protected by the SCRA?15-7
  • Q 15.10 : When does military service begin and end?15-8
  • Q 15.11 : What is the DMDC website?15-9
    • Q 15.11.1 : Is a search result from the DMDC a “certificate” under the SCRA?15-9
  • Q 15.12 : May a servicemember waive the protections afforded by the SCRA?15-9
  • : Procedural Protections15-10
  • : Default Judgment Protection15-10
  • Q 15.13 : What is the SCRA’s default judgment protection?15-10
  • Q 15.14 : What is a military status affidavit?15-10
    • Q 15.14.1 : What actions may a court take after the filing of a military status affidavit?15-11
  • Q 15.15 : If a default judgment is entered against a servicemember, what effect does that have upon a servicemember?15-11
    • Q 15.15.1 : If a default judgment is entered against a servicemember, what effect does that have upon a bona fide purchaser of property?15-12
  • : Stay of Proceedings15-12
  • Q 15.16 : If a servicemember does not have actual notice of a proceeding, how may a servicemember’s attorney obtain a stay of proceedings?15-12
  • Q 15.17 : If a servicemember has actual notice of a proceeding, how may the servicemember obtain a stay of proceedings?15-12
  • : Statute of Limitations and Redemption15-13
  • Q 15.18 : How does the SCRA affect a statute of limitations or a right of redemption?15-13
  • : Substantive Protections15-14
  • : Interest Rate Limitation15-14
  • Q 15.19 : Does the SCRA impose any limits on the interest rate charged to protected persons?15-14
    • Q 15.19.1 : What is “interest” under the SCRA?15-14
    • Q 15.19.2 : For purposes of receiving the statutory interest rate benefit, what is “written notice” under the SCRA?15-15
    • Q 15.19.3 : For purposes of receiving the statutory interest rate benefit, what is an “order calling the servicemember to military service”?15-15
    • Q 15.19.4 : What procedure must a covered person follow to receive the interest rate protection?15-16
  • Q 15.20 : Are there any circumstances in which the creditor may seek exceptions from the interest rate benefit?15-16
  • Q 15.21 : How should a creditor calculate the application of the interest rate benefit?15-17
  • Q 15.22 : Does the SCRA’s interest rate protection apply to student loans?15-17
  • Q 15.23 : How does the SCRA’s interest rate protection apply to revolving credit accounts?15-18
  • : Foreclosure Protection15-18
  • Q 15.24 : Does the SCRA protect servicemembers against foreclosure?15-18
  • Q 15.25 : Who is entitled to the SCRA’s foreclosure protections?15-20
    • Q 15.25.1 : Does foreclosure protection extend after the end of military service?15-20
  • : Eviction Protection15-21
  • Q 15.26 : Does the SCRA protect covered persons against eviction?15-21
    • Q 15.26.1 : What relief is available to a landlord seeking eviction?15-22
  • : Termination of Residential or Motor Vehicle Leases15-23
  • Q 15.27 : What protections apply to a lease of real property under the SCRA?15-23
  • Q 15.28 : What protections apply to a motor vehicle lease under the SCRA?15-23
  • Q 15.29 : What steps may a covered lessee take to terminate a real property or motor vehicle lease under the SCRA?15-24
    • Q 15.29.1 : If the lease is properly terminated, how does a lessor calculate remaining payments for a lease?15-24
  • : Other Substantive Protections15-25
  • Q 15.30 : How does the SCRA affect installment contracts?15-25
  • Q 15.31 : Does the SCRA affect storage liens?15-25
  • Q 15.32 : How may a court protect a servicemember from fines and penalties under contracts?15-26
  • Q 15.33 : May a servicemember seek anticipatory SCRA relief?15-26
    • Q 15.33.1 : What happens to the SCRA protections after the servicemember leaves military service?15-26
  • : Miscellaneous Protections15-27
  • Q 15.34 : Does the SCRA apply to commercial loans?15-27
  • Q 15.35 : If a servicemember applies for SCRA protection, will this interfere with the servicemember’s ability to obtain credit in the future?15-27
  • Q 15.36 : Who controls a servicemember’s power of attorney if the servicemember is missing in action?15-29
    • Q 15.36.1 : May a creditor seize a servicemember’s personal assets when there is a default on the servicemember’s business or trade obligations?15-30
  • : Protections and Benefits for Non-Servicemembers15-30
  • : Dependents15-30
  • Q 15.37 : Who qualifies as a dependent?15-30
  • Q 15.38 : What protections may dependents receive?15-30
  • : Guarantors/Sureties/Co-Obligors15-31
  • Q 15.39 : What protections are available for non-servicemembers who are not dependents but are liable on a servicemember’s obligations?15-31
  • : Enforcement and Remedies15-32
  • Q 15.40 : May individual borrowers bring private causes of actions?15-32
  • Q 15.41 : May the government bring enforcement actions based upon SCRA violations?15-32
  • : Military Lending Act15-33
  • Q 15.42 : What is the MLA?15-33
  • : Legal Framework15-34
  • Q 15.43 : Who is entitled to the protections of the MLA?15-34
  • Q 15.44 : What types of consumer credit are covered by the MLA?15-34
  • Q 15.45 : What types of credit transactions are excluded?15-35
  • Q 15.46 : What is the maximum amount that a creditor may charge under the MLA?15-35
  • Q 15.47 : How does the MLA calculate the MAPR?15-36
    • Q 15.47.1 : What are “bona fide” fees under the MLA?15-36
  • Q 15.48 : How does a creditor determine if a borrower is entitled to the MLA’s protections?15-37
  • : Examination by Regulators for MLA Compliance15-38
  • Q 15.49 : What are the examination procedures for MLA compliance?15-38
Chapter 16: Service Providers and Third-Party Risk
  • : The Basics16-3
  • Q 16.1 : What are service providers?16-3
  • Q 16.2 : Are vendors and suppliers the same as service providers?16-3
  • Q 16.3 : What are common types of service provider relationships?16-4
  • : Types of Service Provider Risks16-5
  • Q 16.4 : What are the key risks that regulators have identified regarding the use of service providers?16-5
    • Q 16.4.1 : What is compliance risk?16-6
    • Q 16.4.2 : What is reputation risk?16-6
    • Q 16.4.3 : What is strategic risk?16-6
    • Q 16.4.4 : What is transaction risk?16-7
    • Q 16.4.5 : What is credit risk?16-7
    • Q 16.4.6 : What is operational risk?16-7
    • Q 16.4.7 : What is concentration risk?16-7
    • Q 16.4.8 : What is country risk?16-8
    • Q 16.4.9 : What are legal risks?16-8
  • : Regulatory Authority16-9
  • Q 16.5 : Who has regulatory authority to enforce oversight of service providers by financial institutions?16-9
  • Q 16.6 : What are the primary sources of regulatory requirements or guidance?16-9
  • Q 16.7 : Are the supervisory powers afforded to each of the regulators consistent?16-10
    • Q 16.7.1 : What steps should a supervised institution take to ensure compliance with the latest applicable guidance?16-10
  • Q 16.8 : How do regulators enforce service provider oversight?16-11
  • Q 16.9 : What is OCC Bulletin 2013-29?16-11
    • Q 16.9.1 : What are the most significant changes under OCC Bulletin 2017-7?16-11
    • Q 16.9.2 : Under OCC Bulletin 2017-7, what aspects of a bank’s vendor management processes does the examiner review?16-12
    • Q 16.9.3 : How does the OCC determine the quantity of risk associated with a particular third-party relationship?16-12
    • Q 16.9.4 : How does the OCC determine the quality of risk associated with a particular third-party relationship?16-13
  • Q 16.10 : Does the CFPB allow for “flexibility” in the oversight of third-party service providers?16-14
  • Q 16.11 : What remedies are available to regulators against financial institutions for failure to manage service providers effectively?16-15
    • Q 16.11.1 : What is a Matter Requiring Attention (MRA)?16-15
    • Q 16.11.2 : What is a Memorandum of Understanding (MOU)?16-15
    • Q 16.11.3 : What is a public enforcement action?16-15
  • Q 16.12 : May enforcement actions be brought by regulators directly against service providers?16-16
  • Q 16.13 : Do regulators prepare examination reports for all TSPs?16-16
  • : Regulatory Expectations of Service Provider Engagements16-18
  • Q 16.14 : What are the regulators’ expectations for oversight of service providers?16-18
    • Q 16.14.1 : What are “critical activities?”16-18
  • Q 16.15 : Is there a standard risk-rating scale for vendors?16-19
    • Q 16.15.1 : Once the inherent risks, costs, and benefits have been identified, what should the financial institution do?16-19
  • Q 16.16 : How frequently should risk assessments be conducted?16-20
  • Q 16.17 : Once (i) the risk assessment and planning are completed, and (ii) a determination to move forward with outsourcing an activity is confirmed, what specific steps should a company take in performing due diligence of potential vendors prior to negotiating a contract with a service provider?16-20
  • Q 16.18 : Are financial institutions required to perform due diligence on all service providers prior to engagement?16-21
  • Q 16.19 : What should institutions consider when negotiating a contract with a service provider?16-21
    • Q 16.19.1 : Does the CFPB specify anything in particular for contracts with service providers?16-22
  • Q 16.20 : What are Service Level Agreements? How are they used to manage service providers to financial institutions?16-22
    • Q 16.20.1 : How are SLAs used to manage service providers to financial institutions?16-23
  • Q 16.21 : Once a contract with a service provider is executed, what types of ongoing relationship monitoring activities are required?16-23
  • Q 16.22 : What are current areas of regulatory focus related to ongoing monitoring?16-24
    • Q 16.22.1 : What aspects of legal and regulatory compliance should an institution focus as part of its ongoing monitoring of vendors?16-24
    • Q 16.22.2 : What does “early identification of issues” mean?16-24
    • Q 16.22.3 : What aspects of information security should an institution focus on with respect to ongoing monitoring?16-25
    • Q 16.22.4 : What actions should a financial institution take to ensure that subcontractors to service providers are complying with the contract and applicable laws and regulations?16-25
    • Q 16.22.5 : What steps should an institution take in its ongoing monitoring of consumer complaints?16-25
  • Q 16.23 : What considerations should financial institutions give when terminating a relationship with a service provider?16-26
  • Q 16.24 : What role do executive management and the board have with respect to the engagement of service providers?16-26
  • Q 16.25 : What are the risks to consumers associated with some production incentive programs?16-27
    • Q 16.25.1 : What guidance does the CFPB provide to prevent risks to consumers from certain production incentive programs?16-28
  • : Compliance with Federal Consumer Financial Protection Laws16-28
  • Q 16.26 : How do the Dodd-Frank Act’s unfair, deceptive, and abusive acts and practices (UDAAP) standards apply to service providers?16-28
Chapter 17: Marketplace Lending
  • : Introduction to Marketplace Lending17-2
  • Q 17.1 : What is marketplace lending?17-2
    • Q 17.1.1 : How does marketplace lending differ from other forms of non-bank consumer lending, such as payday lending?17-3
    • Q 17.1.2 : Is marketplace lending innovation outpacing regulation?17-3
  • Q 17.2 : How did marketplace lending get started?17-3
    • Q 17.2.1 : Who are the primary players in marketplace lending?17-4
    • Q 17.2.2 : How are typical marketplace lending platforms structured?17-4
    • Q 17.2.3 : How does Prosper operate?17-5
    • Q 17.2.4 : What products does Prosper offer?17-5
    • Q 17.2.5 : How does Prosper typically originate its investment products?17-6
    • Q 17.2.6 : What other ways may marketplace lenders originate their investment products?17-6
  • Q 17.3 : What interest rate limits apply to marketplace lending platform-originated loans?17-7
  • Q 17.4 : May anyone invest in marketplace lending platform products?17-7
  • Q 17.5 : What other requirements apply to marketplace lending platform investors?17-7
  • Q 17.6 : May institutional investors purchase marketplace lending platform products?17-8
  • : Principal Risks in Marketplace Lending17-8
  • Q 17.7 : How are marketplace investors repaid?17-8
  • Q 17.8 : What risks do underlying borrowers pose in marketplace lending?17-8
  • Q 17.9 : Are marketplace investors exposed to platform risk?17-9
    • Q 17.9.1 : What risks do platforms pose in marketplace lending?17-9
    • Q 17.9.2 : What makes marketplace investment more risky than investments in publicly-traded companies?17-9
  • Q 17.10 : How have marketplace lending platforms fared recently?17-10
  • Q 17.11 : Is the marketplace lending market inherently risky?17-10
  • Q 17.12 : What risks does the industry pose in marketplace lending?17-10
  • Q 17.13 : What risks does regulation pose in marketplace lending?17-11
    • Q 17.13.1 : What types of regulation does marketplace lending face?17-11
    • Q 17.13.2 : How do bankruptcy laws affect marketplace lending?17-11
    • Q 17.13.3 : How have macroeconomic trends affected regulation of marketplace lending?17-12
    • Q 17.13.4 : How did the 2016 election affect marketplace lending?17-12
  • : Major Legal Issues That Face Marketplace Lending17-12
  • Q 17.14 : When are marketplace lenders regulated as lenders?17-12
    • Q 17.14.1 : What is the substantive approach to determining when a marketplace platform acts as a lender?17-13
    • Q 17.14.2 : What are the consequences of Cashcall in marketplace lending?17-13
    • Q 17.14.3 : Do courts also look to the form of the transaction in determining when a marketplace platform acts as a lender?17-14
  • Q 17.15 : When is state banking law preempted by federal law?17-14
    • Q 17.15.1 : Does Madden have any effect on marketplace lending?17-15
    • Q 17.15.2 : What are the consequences of Madden for marketplace lending?17-15
    • Q 17.15.3 : What other effects has the Madden litigation had in consumer finance?17-16
    • Q 17.15.4 : Is Madden likely to become the law nationwide?17-16
  • : Regulatory Regimes Governing Marketplace Lending17-16
  • Q 17.16 : Does marketplace lending implicate the Securities Act of 1933?17-16
    • Q 17.16.1 : Do marketplace lenders issue securities?17-17
    • Q 17.16.2 : May marketplace lenders employ any of the common exemptions from registration under the Securities Act?17-17
    • Q 17.16.3 : Who is considered an “accredited investor”?17-18
    • Q 17.16.4 : Must marketplace lenders take reasonable steps to verify that investors are accredited?17-18
    • Q 17.16.5 : May marketplace lenders rely on the Jumpstart Our Business Startups (JOBS) Act to solicit investors?17-18
    • Q 17.16.6 : Are there any dollar limitations on sales to investors?17-19
    • Q 17.16.7 : What is an “emerging growth company”?17-19
  • : Crowdfunding17-19
  • Q 17.17 : What is crowdfunding and how is employed by marketplace lenders?17-19
    • Q 17.17.1 : What is loan crowdfunding?17-20
    • Q 17.17.2 : What is real estate investment crowdfunding?17-20
    • Q 17.17.3 : What is venture investment crowdfunding?17-20
    • Q 17.17.4 : What is donation and reward-based crowdfunding?17-20
  • Q 17.18 : Is crowdfunding exempt from registration under the Securities Act?17-20
  • : Exchange Act Implications17-21
  • Q 17.19 : Must marketplace lenders be registered under and comply with the Securities Exchange Act of 1934?17-21
    • Q 17.19.1 : Are marketplace lenders subject to an “issuers exemption”?17-21
    • Q 17.19.2 : What is a broker?17-21
    • Q 17.19.3 : What is a dealer?17-22
  • : Other Statutes17-22
  • Q 17.20 : Are marketplace lenders “advisers” under the Investment Advisers Act of 1940?17-22
    • Q 17.20.1 : What is an investment adviser?17-22
  • Q 17.21 : Are marketplace lenders “investment companies” for purposes of the Investment Company Act of 1940?17-23
    • Q 17.21.1 : What is an investment company?17-23
  • : Liability Under Consumer Credit, Debt Collection and Privacy Statutes17-24
  • Q 17.22 : Are marketplace lenders subject to federal consumer credit, debt collection and financial privacy laws?17-24
  • Q 17.23 : Could a marketplace lender be liable for fair lending violations under the Equal Credit Opportunity Act?17-24
  • Q 17.24 : Are loans made by marketplace lenders subject to the Truth in Lending Act?17-24
  • Q 17.25 : Must marketplace lenders comply with the Fair Credit Reporting Act?17-25
  • : The Future of Marketplace Lending17-25
  • Q 17.26 : What is the future of marketplace lending?17-25
Chapter 18: Short-Term Lending
  • : Basics of Short-Term Lending18-3
  • Q 18.1 : What is a short-term loan?18-3
  • Q 18.2 : What are the common features of payday loans?18-3
    • Q 18.2.1 : What are the costs of a payday loan?18-4
    • Q 18.2.2 : What are the common eligibility requirements for a payday loan?18-4
    • Q 18.2.3 : What are the typical repayment requirements for a payday loan?18-4
  • Q 18.3 : What are the common features of deposit advances?18-5
    • Q 18.3.1 : How are the costs of a deposit advance determined?18-5
    • Q 18.3.2 : What are the eligibility requirements for a deposit advance?18-5
    • Q 18.3.3 : What are the credit limits on deposit advances?18-6
    • Q 18.3.4 : What are the repayment requirements for deposit advances?18-6
  • Q 18.4 : What are refund anticipation loans?18-6
    • Q 18.4.1 : What are refund anticipation checks?18-7
  • : CFPB Oversight of the Short-Term Lending Industry18-7
  • Q 18.5 : Does the CFPB have the authority to supervise and examine lenders that provide short-term loans?18-7
    • Q 18.5.1 : Does CFPB authority extend to tribal short-term lending?18-8
  • Q 18.6 : What are the CFPB examination initiatives regarding short-term lenders?18-8
    • Q 18.6.1 : What are the CFPB’s compliance management expectations for short-term lenders?18-10
  • Q 18.7 : Has the CFPB conducted a review of the short-term lending industry?18-10
    • Q 18.7.1 : What were the key findings derived from the CFPB’s first targeted review?18-11
    • Q 18.7.2 : What is the cause of sustained use of short-term lending products?18-13
    • Q 18.7.3 : What were the key findings in the CFPB’s second (supplemental analysis) of payday lending?18-13
  • Q 18.8 : Has the CFPB taken action to regulate payday and other short-term lending?18-14
  • : Proposed Payday Lending Rule18-14
  • Q 18.9 : What is the scope of the Proposed Payday Lending Rule?18-14
  • Q 18.10 : What are the primary requirements of the Proposed Payday Lending Rule?18-15
    • Q 18.10.1 : Under the proposed rule, must the lender make an ability-to-repay determination?18-15
    • Q 18.10.2 : Under the proposal, may a lender refinance or make a new short-term loan within thirty days of an earlier loan?18-16
    • Q 18.10.3 : Does the proposed rule allow any safe harbors for lenders?18-17
  • Q 18.11 : What has the CFPB proposed regarding customer payment procedures?18-17
  • Q 18.12 : Are there any new recordkeeping requirements?18-18
  • Q 18.13 : Would there be any new compliance requirements?18-18
  • Q 18.14 : Has the CFPB indicated when it will implement a final version of the Proposed Payday Lending Rule?18-18
  • : Online Payday Lending18-19
  • Q 18.15 : What are the common features of the online payday lending model?18-19
  • Q 18.16 : Has there been other significant regulatory and enforcement focus on the online payday lending industry?18-19
  • : FDIC and OCC Oversight of the Short-Term Lending Industry18-20
  • Q 18.17 : What is the Federal Deposit Insurance Corporation’s Small-Dollar Loan Pilot Program?18-20
  • Q 18.18 : Has the FDIC issued guidelines for small-dollar loans?18-21
  • Q 18.19 : Have the FDIC and OCC provided guidance to FDIC-supervised financial institutions that offer or may consider offering deposit advance products?18-22
  • Q 18.20 : Has the OCC issued any guidance regarding RALs?18-23
    • Q 18.20.1 : Have the FDIC and OCC actions forced banks to stop offering RALs?18-24
    • Q 18.20.2 : Has the CFPB taken any enforcement actions relating to RALs?18-24
  • : Compliance with Federal Consumer Financial Laws by Short-Term Lenders18-24
  • : Relevant Laws18-24
  • Q 18.21 : Which federal consumer financial laws are applicable to short-term loans?18-24
  • : Truth in Lending Act and Regulation Z18-26
  • Q 18.22 : What should a short-term lender do to assure compliance with the Truth in Lending Act and its implementing Regulation Z?18-26
  • : Fair Credit Billing Act18-26
  • Q 18.23 : What are the key provisions of the Fair Credit Billing Act applicable to short-term lenders?18-26
  • Q 18.24 : Does the Electronic Fund Transfer Act require authorization for account transfers?18-26
  • : Debt Collection18-27
  • Q 18.25 : Does the Fair Debt Collection Practices Act apply to short-term lending?18-27
  • : Credit Reporting18-27
  • Q 18.26 : What are some of the essential provisions of the Fair Credit Reporting Act that apply to short-term lenders?18-27
  • : Privacy Issues18-28
  • Q 18.27 : Does the Gramm-Leach-Bliley Act apply to short-term lenders?18-28
  • Q 18.28 : What are the Federal Trade Commission’s Privacy and Safeguards Rules?18-29
  • : Fair Lending Issues18-29
  • Q 18.29 : Are there any fair lending issues applicable to short-term lenders?18-29
  • : Unfair, Deceptive, or Abusive Acts or Practices18-30
  • Q 18.30 : What can a short-term lender do to prevent any unfair, deceptive, or abusive acts or practices with respect to its interactions with consumers?18-30
  • : Military Lending18-31
  • Q 18.31 : What must a short-term lender do to facilitate compliance with the Military Lending Act?18-31
  • Q 18.32 : How can a short-term lender facilitate compliance with the Servicemembers Civil Relief Act?18-32
  • : Office of Foreign Assets Control18-33
  • Q 18.33 : What must a short-term lender do to facilitate compliance with the laws administered by the Office of Foreign Assets Control?18-33
  • : Bank Secrecy Act and Anti-Money Laundering Laws18-34
  • Q 18.34 : Are there Bank Secrecy Act and Anti-Money Laundering Law issues for short-term lenders?18-34
  • : USA PATRIOT Act18-36
  • Q 18.35 : Must a short-term lender comply with the USA PATRIOT Act?18-36
  • : Disposition of Consumer Reports18-36
  • Q 18.36 : What is the FTC Consumer Information Disposal Rule?18-36
  • : State Regulation of Short-Term Lending18-38
  • Q 18.37 : Does state law impose requirements and restrictions on short-term loans?18-38
  • : Effect on Bankruptcy18-39
  • Q 18.38 : Are short-term lenders prohibited from cashing a debtor’s check after they have filed a petition for relief under the U.S. Bankruptcy Code?18-39
  • : Alternative Sources of Short-Term Credit18-40
  • Q 18.39 : In light of the significant industry scrutiny, have there been any government alternative proposals for the delivery short-term loans?18-40
Chapter 19: Secondary Market/Securitization
  • : Secondary Markets19-4
  • Q 19.1 : What are “secondary market” transactions?19-4
  • Q 19.2 : What is the difference between a loan assignment and a loan participation?19-6
  • Q 19.3 : What is “structured finance”?19-7
  • Q 19.4 : What is an SPE?19-7
  • : Securitization19-8
  • Q 19.5 : What is “securitization”?19-8
  • Q 19.6 : What purposes does securitization serve?19-9
  • Q 19.7 : What assets are appropriate for securitization?19-9
  • Q 19.8 : How does securitization reduce the risk of a sponsor’s bankruptcy?19-10
  • : Bankruptcy-Remote Special-Purpose Entities19-11
  • : Bankruptcy-Remote Status19-11
  • Q 19.9 : How does one achieve bankruptcy-remote status?19-11
  • : Form of Entity and Organization19-12
  • Q 19.10 : What entity form should an SPE have and how is it organized?19-12
  • Q 19.11 : What characteristics should be reflected in an SPE’s organizational documents?19-12
    • Q 19.11.1 : What is the role of “independent directors” in the management of an SPE?19-13
    • Q 19.11.2 : What other characteristics should be reflected in so-called separateness covenants?19-13
  • : Ignoring Entity Separateness19-14
  • Q 19.12 : When will entity separateness be ignored?19-14
  • Q 19.13 : What is “piercing the corporate veil” under state law?19-15
  • Q 19.14 : What is substantive consolidation under the Bankruptcy Code?19-15
    • Q 19.14.1 : What is a “non-consolidation opinion” and under what circumstances can it be rendered?19-16
  • : Sponsor’s Sale of Assets to an SPE19-17
  • Q 19.15 : When will a court recognize that a sponsor has sold assets to an SPE?19-17
  • Q 19.16 : What is a “recharacterization risk”?19-17
    • Q 19.16.1 : What are the characterization options of a transaction designated by the parties as a sale?19-18
    • Q 19.16.2 : What characteristics are required for a “true sale” or “absolute conveyance”?19-18
  • Q 19.17 : Will a bankruptcy court take a different view, even on a temporary basis?19-20
  • : Compliance with the Dodd-Frank Act Risk Retention Requirements19-21
  • Q 19.18 : Why is there a Risk Retention Requirement under the Dodd-Frank Act, and what is it?19-21
  • Q 19.19 : How does one comply with the 5% risk retention rule?19-21
  • Q 19.20 : Who has to retain the risk?19-22
  • Q 19.21 : Are there exemptions to the risk retention rule?19-22
  • Q 19.22 : What impact will the risk retention rule have on consolidation and “true sale” issues?19-23
  • : Issuance of Notes in a Market Environment19-24
  • Q 19.23 : What are the features of a typical transaction in which financial assets are securitized?19-24
  • Q 19.24 : How does securitization reallocate the cash flows generated by, and attendant risks associated with, the subject assets to different investors?19-26
    • Q 19.24.1 : What is “pooling”?19-26
    • Q 19.24.2 : What is “tranching”?19-26
    • Q 19.24.3 : What is the “waterfall”?19-27
    • Q 19.24.4 : What credit enhancement techniques might be used in addition to pooling and tranching?19-27
    • Q 19.24.5 : What techniques are used to identify and segregate cash collections?19-28
    • Q 19.24.6 : Must a separate collection account be used?19-28
    • Q 19.24.7 : What are typical representations, covenants, and defaults included in structured finance and securitization transactions?19-29
  • Q 19.25 : Is one SPE enough, or is a trust required?19-30
    • Q 19.25.1 : What role do trusts play in securitization?19-30
    • Q 19.25.2 : What are the rights and duties of trustees?19-30
  • Q 19.26 : Do the underlying deal documents need to be amended?19-31
    • Q 19.26.1 : Do assignments of mortgages need to be recorded?19-31
    • Q 19.26.2 : Do vehicle titles need to be assigned and reissued?19-32
    • Q 19.26.3 : What is a “titling trust”?19-32
    • Q 19.26.4 : Do obligors need to be notified?19-33
  • : Servicers19-33
  • Q 19.27 : What is the role of the servicer?19-33
  • Q 19.28 : Under what standards does the servicer act?19-33
  • Q 19.29 : What is a “back-up” servicer?19-34
  • Q 19.30 : What does the servicer enforce?19-34
    • Q 19.30.1 : Who should have what in order to enforce?19-35
    • Q 19.30.2 : Is a separate custodian required?19-35
  • : Indemnification Obligations19-36
  • Q 19.31 : Who indemnifies whom, and for what?19-36
  • Q 19.32 : What happens when lenders are paid or the portfolio has wound down?19-37
  • Q 19.33 : What if there aren’t enough collections?19-38
  • Q 19.34 : What is a “clean-up call”?19-38
  • : SEC Regulation AB and AB II19-39
  • Q 19.35 : Are there SEC rules or regulations specific to the issuance of asset-backed securities, mortgage-backed securities, and collateralized debt obligations?19-39
  • : Accounting Treatment of Securitization Transactions19-40
  • Q 19.36 : How are securitization transactions accounted for, generally speaking?19-40
Chapter 20: A Guide to the 2006 ALTA Loan Policy of Title Insurance and Closing Protection Letters; and Appendix 20A
  • : The Basics of the ALTA 2006 Loan Policy20-2
  • Q 20.1 : What is title insurance?20-2
  • Q 20.2 : What are the components of the 2006 Loan Policy form?20-3
    • Q 20.2.1 : What is Schedule A?20-3
    • Q 20.2.2 : What is Schedule B?20-4
    • Q 20.2.3 : What are endorsements?20-5
  • Q 20.3 : What is the term of the policy?20-6
  • Q 20.4 : Who is an insured under the 2006 Loan Policy?20-7
  • Q 20.5 : Does a release of the mortgage terminate coverage under the policy?20-10
  • : Insurer’s Duties and Obligations20-10
  • : Primary Obligations20-10
  • Q 20.6 : What are a title insurer’s primary obligations?20-10
  • Q 20.7 : What are covered risks?20-11
  • Q 20.8 : What are the exclusions from coverage?20-15
  • : Duty to Defend20-17
  • Q 20.9 : What is the scope of the duty to defend?20-17
  • Q 20.10 : What is an “acceptance of a claim with a reservation of rights”?20-18
  • Q 20.11 : Does the title insurer have a duty to defend against all counts of a complaint?20-19
  • Q 20.12 : How does an insured tender the defense of an action?20-20
  • Q 20.13 : Who selects counsel to defend the insured?20-20
  • : Insured’s Claim and Insurer’s Receipt of a Claim20-20
  • Q 20.14 : How does an insured make a claim?20-20
  • Q 20.15 : What are the title insurer’s options upon receipt of a claim?20-22
  • : Title Insurer’s Payment for Losses or Damages20-24
  • Q 20.16 : How are the insured’s losses or damages determined?20-24
    • Q 20.16.1 : What is the “Amount of Insurance”?20-24
    • Q 20.16.2 : What is the “Indebtedness”?20-25
    • Q 20.16.3 : What is the “difference between the value of the title as insured and the value of the title subject to the risk insured against under the policy”?20-26
  • Q 20.17 : As of what date is the loss determined?20-26
  • Q 20.18 : When must the title insurer pay a loss?20-28
  • Q 20.19 : What is the extent of the title insurer’s subrogation rights?20-29
  • : Title Insurer’s Denial of Claims20-30
  • Q 20.20 : How should an insured respond to a denial of a claim?20-30
  • Q 20.21 : What is an insured’s recourse for a denial of a claim?20-30
  • Q 20.22 : May an insured compel arbitration of a dispute with the insurer under the policy?20-31
  • Q 20.23 : What is a closing protection letter?20-31
  • Q 20.24 : What is the purpose of a CPL?20-31
  • Q 20.25 : Are all CPLs the same?20-33
  • Q 20.26 : Who is protected?20-33
  • Q 20.27 : What protection does a CPL provide?20-34
  • Q 20.28 : What are the conditions and exclusions for coverage?20-35
  • Q 20.29 : Does the CPL make the Approved Attorney or Issuing Agent an agent of the Title Company for closing the real estate transaction?20-36
  • Q 20.30 : Why are CPLs necessary where the lender obtained a title commitment?20-36
  • Q 20.31 : Are attorneys’ fees recoverable under a CPL?20-37
  • Q 20.32 : What are blanket CPLs?20-37
  • Q 20.33 : Can a Title Company cancel a CPL?20-37
  • Q 20.34 : When should a claim under a CPL be brought?20-38
Chapter 21: Mortgage Loan Servicing
  • : Real Estate Settlement Procedures Act21-3
  • : Loan Servicing21-3
  • Q 21.1 : What is servicing, and what is a mortgage loan servicer?21-3
  • Q 21.2 : How is a loan servicer different from the originator?21-3
  • Q 21.3 : How is a loan servicer different from an investor/owner?21-4
  • Q 21.4 : What is a “master servicer”?21-5
  • Q 21.5 : Do RESPA’s servicing requirements apply to all consumer credit loans?21-5
  • : The CFPB’s Mortgage Servicing Rules21-6
  • Q 21.6 : Has the CFPB issued any rules regulating mortgage servicing?21-6
    • Q 21.6.1 : Must periodic billing statements be provided?21-6
    • Q 21.6.2 : What are the interest-rate adjustment notice requirements for ARMs?21-7
    • Q 21.6.3 : Do the rules require prompt payment crediting and payoff statements?21-7
    • Q 21.6.4 : Do the rules provide requirements for lender-placed insurance?21-7
    • Q 21.6.5 : How fast must servicers respond to error resolution and information requests?21-8
    • Q 21.6.6 : What type of documentation and record-keeping is required?21-8
    • Q 21.6.7 : Do the rules address requirements for communications with delinquent borrowers?21-9
    • Q 21.6.8 : Must the servicer attempt to maintain continuity of contact with delinquent borrowers?21-9
    • Q 21.6.9 : Is the servicer required to engage in loss mitigation efforts?21-9
    • Q 21.6.10 : Are there any prohibitions regarding “dual tracking” of foreclosures and loan modification efforts?21-10
    • Q 21.6.11 : What has the CFPB done to monitor compliance with the Mortgage Servicing Rules?21-11
  • : Transfer of Servicing Rights: Disclosure Requirements21-13
  • Q 21.7 : Does RESPA require disclosures when servicing rights are transferred?21-13
  • Q 21.8 : What must the transferring entity disclose?21-13
  • Q 21.9 : When must the transferor servicer provide the notice?21-14
  • Q 21.10 : Does the transferee entity have a disclosure obligation?21-15
  • Q 21.11 : What if the borrower submits a payment to the transferor servicer after the effective date of transfer?21-15
  • Q 21.12 : Are servicing transfers affected by the Mortgage Servicing Rules?21-15
  • : Liability of Servicers21-18
  • Q 21.13 : What liability do servicers have for violations of law that occurred at loan origination?21-18
  • : Crediting Payments for “Open-End” Credit21-19
  • Q 21.14 : What federal obligations apply to crediting payments?21-19
  • Q 21.15 : What are “reasonable requirements for payments”?21-19
  • Q 21.16 : What happens if a creditor accepts a non-conforming payment?21-20
  • : Qualified Written Requests, Notices of Error, and Information Requests21-20
  • Q 21.17 : What is a Qualified Written Request?21-20
    • Q 21.17.1 : Do QWRs still exist under the Mortgage Servicing Rules?21-20
  • Q 21.18 : What constitutes a valid QWR? What does not?21-21
    • Q 21.18.1 : What kinds of errors are covered?21-21
    • Q 21.18.2 : Are there any other limits on QWRs?21-22
  • Q 21.19 : What are the timing requirements for responding to a QWR?21-24
  • Q 21.20 : How should a servicer respond to a QWR?21-24
  • Q 21.21 : What actions may a servicer take during the pendency of a QWR?21-25
  • : Insurance21-25
  • : Lender-Placed Insurance21-25
  • Q 21.22 : What is lender-placed insurance?21-25
  • Q 21.23 : Under what circumstances may a servicer impose lender-placed insurance?21-26
  • Q 21.24 : Does the Dodd-Frank Act impose requirements for lender-placed insurance?21-27
  • : Mortgage Clauses21-28
  • Q 21.25 : What rights do servicers have to casualty insurance proceeds?21-28
  • : Servicers and the Fair Debt Collection Practices Act21-29
  • Q 21.26 : Are servicers subject to the Fair Debt Collection Practices Act?21-29
  • : Maintenance of Escrow Accounts21-29
  • Q 21.27 : What federal requirements apply to the maintenance of escrow accounts?21-29
  • Q 21.28 : What is a “target balance”?21-30
  • Q 21.29 : What is an escrow account analysis?21-30
  • Q 21.30 : What is the escrow account “cushion”?21-32
  • Q 21.31 : How is an escrow account analysis conducted?21-32
  • Q 21.32 : What is the difference between a shortage and a deficiency?21-33
  • Q 21.33 : What must the servicer do in the event of a shortage?21-33
  • Q 21.34 : What must the servicer do in the event of a deficiency?21-34
  • Q 21.35 : What must the servicer do in the event of a surplus?21-34
  • Q 21.36 : What obligations does the servicer have to make timely payments?21-35
  • Q 21.37 : What are the servicer’s record-keeping obligations for escrow accounts?21-35
  • Q 21.38 : Is there a private right of action for failure to adhere to the RESPA and Regulation X escrow obligations?21-36
  • Q 21.39 : What changes does the Dodd-Frank Act make to escrow obligations?21-36
  • : Bankruptcy Filing by Borrower21-37
  • Q 21.40 : How are servicing rights impacted by a borrower’s bankruptcy filing?21-37
Chapter 22: Residential Foreclosures and Evictions
  • : Foreclosures22-2
  • : Basics of Foreclosure22-2
  • Q 22.1 : What is a foreclosure?22-2
  • Q 22.2 : What gives a lender the right to foreclose?22-2
  • Q 22.3 : What is the difference between a mortgage and a deed of trust?22-3
  • Q 22.4 : Who has standing to bring a foreclosure action?22-3
  • Q 22.5 : What is MERS?22-4
    • Q 22.5.1 : Does recording a mortgage naming MERS split the note from the security instrument?22-5
  • Q 22.6 : What is the difference between a judicial and a non-judicial foreclosure?22-6
    • Q 22.6.1 : What happens in a judicial foreclosure?22-7
    • Q 22.6.2 : What is an Affidavit of Indebtedness?22-7
    • Q 22.6.3 : What is a “quasi-judicial” foreclosure?22-7
    • Q 22.6.4 : What are the judicial, quasi-judicial, and non-judicial states?22-8
  • Q 22.7 : What is strict foreclosure?22-9
  • : Foreclosure Process22-10
  • Q 22.8 : How is the foreclosure process initiated?22-10
    • Q 22.8.1 : Do some jurisdictions require mediation or counseling before foreclosure?22-10
    • Q 22.8.2 : Must the lender or servicer provide notice of default before commencing foreclosure proceedings?22-11
    • Q 22.8.3 : What happens after the loan is accelerated?22-12
    • Q 22.8.4 : Must lenders/servicers exhaust loan modification efforts prior to foreclosing?22-12
  • Q 22.9 : What effect do loss mitigation efforts have on foreclosure?22-12
    • Q 22.9.1 : May the lender or servicer complete a foreclosure before it has either approved or denied a loan modification application?22-13
    • Q 22.9.2 : Is the lender or servicer required to cancel sales if the borrower completes an application less than thirty-seven days prior to sale?22-14
    • Q 22.9.3 : Do the Mortgage Servicing Rules require that the servicer repeat all these steps every time the borrower applies?22-14
  • Q 22.10 : What are the most common procedures employed by consumers to stop or delay a foreclosure?22-15
  • Q 22.11 : Does a bankruptcy filing suspend foreclosure?22-16
    • Q 22.11.1 : What steps may a lender take to proceed with foreclosure following bankruptcy?22-16
    • Q 22.11.2 : What happens when the borrower confirms a 13 or 11 plan?22-17
    • Q 22.11.3 : What is “lien stripping”?22-18
    • Q 22.11.4 : What other steps do borrowers take during a bankruptcy case to delay foreclosure?22-18
  • Q 22.12 : What percentage of foreclosure cases are contested?22-19
    • Q 22.12.1 : What arguments do borrowers typically pursue in contested foreclosures?22-19
  • Q 22.13 : How long does a foreclosure take?22-21
  • : Borrower/Mortgagor Rights, Remedies and Liabilities22-22
  • Q 22.14 : What remedies does a borrower have against a wrongful foreclosure?22-22
  • Q 22.15 : What is the right to redemption?22-23
  • Q 22.16 : What is a deficiency judgment?22-23
    • Q 22.16.1 : Do some states limit the use of deficiency judgments?22-23
  • : Evictions22-24
  • : Basics of Eviction22-24
  • Q 22.17 : What is an eviction?22-24
    • Q 22.17.1 : Who has standing to evict?22-25
  • : Eviction Process22-25
  • Q 22.18 : What happens when a mortgagor or tenant refuses to vacate the property?22-25
    • Q 22.18.1 : How long does an eviction take?22-26
  • : Holdover Tenant/Borrower Rights and Remedies22-26
  • Q 22.19 : What happens to a holdover tenant’s possessions upon eviction?22-26
  • Q 22.20 : What are a borrower’s remedies for wrongful eviction?22-27
Chapter 23: Fair Debt Collection Practices Act
  • : Introduction23-3
  • Q 23.1 : What is the Fair Debt Collection Practices Act?23-3
  • : Enforcement23-3
  • Q 23.2 : Who enforces the FDCPA?23-3
  • Q 23.3 : What role does the CFPB play?23-3
    • Q 23.3.1 : Under what authority is the CFPB authorized to supervise debt collectors?23-4
    • Q 23.3.2 : What is a “larger participant” as applied to debt collectors?23-4
    • Q 23.3.3 : Has the CFPB provided any supervision or examination guidance?23-4
    • Q 23.3.4 : Does the CFPB also engage in enforcement for or supervision of debt collection activities not covered by the FDCPA?23-5
    • Q 23.3.5 : Has the CFPB taken stances in private FDCPA litigation?23-6
    • Q 23.3.6 : What role does the FTC continue to have on FDCPA enforcement matters?23-6
  • Q 23.4 : Does the FDCPA preempt state law?23-6
  • : Application of the FDCPA23-7
  • : Debts Covered by the FDCPA23-7
  • Q 23.5 : What debts are covered under the FDCPA?23-7
  • Q 23.6 : Must a debtor be in default for the FDCPA to apply?23-7
    • Q 23.6.1 : When does a debt become in “default”?23-8
  • : Persons Considered Debt Collectors Under the FDCPA23-8
  • Q 23.7 : Who is a debt collector under the FDCPA?23-8
    • Q 23.7.1 : Who is included in the definition of debt collector?23-8
    • Q 23.7.2 : What qualifies as a person whose principal purpose is the collection of debt?23-9
    • Q 23.7.3 : What qualifies as a person who regularly collects debts owed to another?23-9
    • Q 23.7.4 : Who is excluded from the definition of debt collector?23-10
    • Q 23.7.5 : Is a creditor ever a debt collector?23-11
    • Q 23.7.6 : Is a debt buyer a debt collector?23-11
    • Q 23.7.7 : Is a lawyer a debt collector?23-12
    • Q 23.7.8 : May a mortgage servicer or assignee of a mortgage be a debt collector?23-12
    • Q 23.7.9 : Is a foreclosure considered debt collection?23-13
  • : Persons Considered Consumers Under the FDCPA23-15
  • Q 23.8 : Who is a consumer under the FDCPA?23-15
    • Q 23.8.1 : Who qualifies as a person who “allegedly” owes the debt?23-15
    • Q 23.8.2 : Are only consumers permitted private right of action under the FDCPA?23-16
  • : Prohibited Practices23-17
  • Q 23.9 : What practices are prohibited under the FDCPA?23-17
  • Q 23.10 : What constitutes harassment or abuse?23-17
  • Q 23.11 : What constitutes false or misleading representation?23-18
  • Q 23.12 : What is meaningful attorney involvement?23-20
  • Q 23.13 : What constitutes unfair practices?23-21
  • : Communicating with a Consumer23-22
  • : Communications Under the FDCPA23-22
  • Q 23.14 : What is considered a communication under the FDCPA?23-22
    • Q 23.14.1 : What does it mean to convey information regarding a debt?23-22
  • : Frequency of Communications23-24
  • Q 23.15 : How many phone calls constitute harassment?23-24
  • : Allowed Communication Times23-25
  • Q 23.16 : At what times may a debt collector call a consumer under the FDCPA?23-25
  • : Meaningful Disclosure of Identity23-25
  • Q 23.17 : How must a collector identify himself during a phone call?23-25
  • : Initial Communications23-26
  • Q 23.18 : What are the requirements for an initial communication?23-26
    • Q 23.18.1 : What does the amount of the debt include?23-27
    • Q 23.18.2 : How must the amount of debt be stated where interest or other charges are accruing?23-27
    • Q 23.18.3 : Who must send an initial communication?23-28
  • : Lawsuits23-28
  • Q 23.19 : Is a lawsuit or a privacy notice considered an initial communication?23-28
  • Q 23.20 : How should a debt collector respond to a consumer’s response to an initial communication?23-29
  • : Overshadowing23-29
  • Q 23.21 : What is overshadowing?23-29
    • Q 23.21.1 : How do debt collectors avoid overshadowing?23-29
    • Q 23.21.2 : Is filing a lawsuit considered overshadowing?23-30
  • : Subsequent Communications23-31
  • Q 23.22 : Are subsequent communications subject to any requirements?23-31
  • : Consumer Disputes23-32
  • Q 23.23 : When may a consumer dispute a debt?23-32
  • Q 23.24 : How may a consumer dispute a debt?23-32
  • Q 23.25 : What constitutes a dispute?23-32
  • Q 23.26 : How should a collection agency respond to a verbal dispute?23-32
  • Q 23.27 : How should a collection agency respond to a written dispute?23-33
  • Q 23.28 : What triggers the verification requirement?23-33
    • Q 23.28.1 : Why is the verification requirement triggered merely by a dispute?23-34
    • Q 23.28.2 : What constitutes verification of a debt?23-34
  • Q 23.29 : How should a disputed debt be credit-reported?23-35
  • Q 23.30 : What must a debt collector avoid saying when communicating with a consumer?23-36
  • : Cease Communications Requests23-36
  • Q 23.31 : When must a debt collector cease communications with a consumer?23-36
  • Q 23.32 : Are there exceptions to communicating with the consumer once a cease communications request has been received?23-37
  • Q 23.33 : At what time does the “cease communications” request become effective?23-37
  • : Communicating with Third Parties23-38
  • Q 23.34 : Are debt collectors allowed to communicate with third parties?23-38
  • Q 23.35 : For what permissible purpose is a debt collector allowed to communicate with a third party concerning the consumer?23-39
  • Q 23.36 : What are the consequences to debt collectors who leave messages on a consumer’s voicemail or answering machine?23-40
  • : Consumers Represented by Attorneys23-42
  • Q 23.37 : Does a debt collector have a duty to communicate with a consumer’s attorney?23-42
  • : Time-Barred Debt23-42
  • Q 23.38 : May a debt collector collect on time-barred debt?23-42
  • Q 23.39 : What happens if the debtor retains an attorney?23-43
  • : Taking Legal Action Against a Consumer23-44
  • Q 23.40 : What are the requirements for taking legal action against a consumer?23-44
  • : Defenses23-44
  • Q 23.41 : Is a debt collector liable for false statements if the false statement is not material?23-44
  • Q 23.42 : Are there any defenses to FDCPA violations?23-45
    • Q 23.42.1 : How may a debt collector prove the bona fide error defense?23-45
  • : Remedies23-46
  • Q 23.43 : What remedies or penalties may be imposed under the FDCPA?23-46
  • : State Statutes23-47
  • Q 23.44 : If the debt is not subject to the FDCPA, are there any other restrictions on collection practices?23-47
Chapter 24: Unfair, Deceptive, or Abusive Acts and Practices Statutes
  • : The FTC Act24-3
  • Q 24.1 : What statutes regulate unfair or deceptive acts or practices?24-3
  • Q 24.2 : How do FTC regulations define “unfair” or “deceptive” acts or practices?24-3
  • Q 24.3 : How is the FTC Act’s prohibition of UDAPs enforced?24-5
  • : The Dodd-Frank Act and the Consumer Financial Protection Bureau24-8
  • : Generally24-8
  • Q 24.4 : How does the Consumer Financial Protection Bureau regulate unfair and deceptive acts and practices?24-8
  • : Definitions24-8
  • Q 24.5 : How are UDAAPs defined?24-8
  • Q 24.6 : How does the Dodd-Frank Act define “unfair” acts or practices?24-9
  • Q 24.7 : How does the Dodd-Frank Act define “deceptive” acts or practices?24-9
  • Q 24.8 : How does Dodd-Frank define “abusive” acts or practices?24-10
  • : Triggering Activity24-11
  • Q 24.9 : Has the CFPB focused on any particular activity as giving rise to UDAAPs?24-11
  • : Enforcement24-13
  • Q 24.10 : Is there a private right of action for enforcement of the Dodd-Frank Act’s proscription of UDAAPs?24-13
  • Q 24.11 : How has the CFPB enforced the prohibition against UDAAPs?24-13
  • Q 24.12 : Have there been any rulings against the CFPB’s enforcement power?24-13
  • : State Regulation24-21
  • : Generally24-21
  • Q 24.13 : How do states regulate against unfair, deceptive, and abusive acts and practices?24-21
  • : The Dodd-Frank Act24-21
  • Q 24.14 : What actions have state officials filed under the Dodd-Frank Act?24-21
  • : Illinois Action Against Lender24-21
  • : Illinois Action Against For-Profit College24-22
  • : New York Action Against Auto Lender24-23
  • : New York Action Against Debt Buyers24-23
  • : Mississippi Action Against Credit Reporting Agency24-24
  • : Florida/Connecticut Action Against Mortgage Rescue Scam24-24
  • : North Carolina/Virginia Action Against Credit Reporting Agency24-25
  • : New Mexico Action Against Tax Refund Scheme24-26
  • : Pennsylvania Action Against Internet-Based Lender24-26
  • : State UDAP Laws24-27
  • Q 24.15 : How do state laws prohibit UDAPs?24-27
  • Q 24.16 : What activities do state UDAP laws prohibit?24-27
  • Q 24.17 : Must an act or practice be intentional to be a UDAP?24-28
  • Q 24.18 : Do state UDAP statutes provide agency rulemaking authority?24-28
  • Q 24.19 : To what activities do state UDAP laws apply?24-28
  • Q 24.20 : How do state agencies enforce the state UDAP laws?24-29
    • Q 24.20.1 : Can consumers bring lawsuits under state UDAP laws?24-29
    • Q 24.20.2 : What damages are available to consumers bringing lawsuits under state UDAP laws?24-30
    • Q 24.20.3 : Can consumers bring class action lawsuits under UDAP?24-31
Chapter 25: Consumer Bankruptcy Law
  • : Bankruptcy Basics25-3
  • Q 25.1 : What is the source of bankruptcy law?25-3
    • Q 25.1.1 : Is state law preempted?25-3
  • Q 25.2 : Why would a consumer debtor file a bankruptcy petition?25-3
  • Q 25.3 : How does a consumer debtor commence a bankruptcy case?25-4
  • Q 25.4 : What occurs when the bankruptcy case is commenced?25-5
  • Q 25.5 : What information must the debtor provide when commencing a bankruptcy case?25-5
    • Q 25.5.1 : What information do the schedules contain?25-6
    • Q 25.5.2 : What information does the statement of financial affairs contain?25-7
    • Q 25.5.3 : What information does the statement of intention contain?25-7
  • Q 25.6 : Do creditors receive notice of filing of the bankruptcy?25-8
  • Q 25.7 : What is a Section 341(a) meeting of creditors?25-8
  • Q 25.8 : What are the different types of bankruptcy cases?25-9
    • Q 25.8.1 : What is a Chapter 7 case?25-9
    • Q 25.8.2 : What is a Chapter 13 case?25-10
    • Q 25.8.3 : How do creditors’ rights differ in a Chapter07 versus Chapter13 case?25-11
    • Q 25.8.4 : What is a Chapter 11 case?25-11
    • Q 25.8.5 : What is a Chapter 12 case?25-12
  • Q 25.9 : Who are the key participants in a consumer bankruptcy case?25-12
    • Q 25.9.1 : Which court presides over a bankruptcy case?25-13
    • Q 25.9.2 : What is the Office of the United States Trustee?25-13
    • Q 25.9.3 : Who are the debtor and other fiduciaries of an estate?25-13
    • Q 25.9.4 : Who are creditors?25-14
    • Q 25.9.5 : In what ways are secured and unsecured creditors treated differently?25-14
    • Q 25.9.6 : May a committee of creditors be appointed?25-15
  • : Early Case Considerations25-15
  • Q 25.10 : What are the initial steps creditors should take, or consider taking, when a bankruptcy case is commenced?25-15
    • Q 25.10.1 : Does the bankruptcy filing require cessation or modification of servicing activities?25-16
    • Q 25.10.2 : Are there any special rules for mortgage servicers?25-16
    • Q 25.10.3 : Should a servicer cease all collection activities?25-16
  • Q 25.11 : What are the steps to consider taking during the bankruptcy case?25-17
  • : Bankruptcy Estate25-19
  • Q 25.12 : What is a bankruptcy estate?25-19
    • Q 25.12.1 : Is there an obligation to turn over property of the estate?25-19
    • Q 25.12.2 : What happens when a secured party has mere possession of collateral?25-19
    • Q 25.12.3 : Is a receiver required to turn over assets?25-19
  • Q 25.13 : May a debtor exempt assets from the bankruptcy estate?25-20
  • Q 25.14 : How does a trustee or other party seek abandonment of assets?25-20
    • Q 25.14.1 : When do assets revest in a Chapter 11, Chapter 12, or Chapter 13 case?25-20
    • Q 25.14.2 : When are assets abandoned in a Chapter 7 case?25-21
  • Q 25.15 : Should a creditor file a proof of claim to preserve its rights to a distribution from the estate?25-21
  • : Business Operations During Case25-22
  • Q 25.16 : What happens when a consumer debtor or trustee seeks to continue business operations during a bankruptcy case?25-22
  • : Automatic Stay25-22
  • : Generally25-22
  • Q 25.17 : What is the automatic stay?25-22
  • Q 25.18 : What actions do not violate the automatic stay?25-23
    • Q 25.18.1 : Do loan modification discussions violate the automatic stay?25-23
    • Q 25.18.2 : May an administrative freeze be placed on a bank account?25-23
    • Q 25.18.3 : What rights do consumer lenders have when a debtor fails to redeem or reaffirm personal property within forty-five days of the Section 341(a) meeting?25-24
  • : Creditor Rights and Remedies25-24
  • Q 25.19 : How does a creditor obtain relief from the automatic stay?25-24
  • Q 25.20 : What happens to any deficiency claim after relief from stay is obtained?25-25
  • : Bad Faith Cases25-26
  • Q 25.21 : What are bad faith cases?25-26
  • Q 25.22 : May a creditor obtain extraordinary relief in the form of “in rem” or prospective relief in bad faith cases?25-26
  • Q 25.23 : When does the automatic stay not go into effect in bad faith cases?25-27
  • : Violations of the Automatic Stay25-27
  • Q 25.24 : May the automatic stay be retroactively terminated to validate unauthorized action?25-27
  • Q 25.25 : What happens when there is a willful violation of the automatic stay?25-27
  • : Individual Chapter 13 and Chapter 11 Plans25-28
  • : Generally25-28
  • Q 25.26 : What is the process to confirm a plan?25-28
    • Q 25.26.1 : What is the process to confirm a Chapter 13 plan?25-28
    • Q 25.26.2 : What is the process to confirm a Chapter 11 plan?25-29
  • Q 25.27 : Are there particular protections for a mortgage loan secured by a principal residence?25-30
  • : The Absolute Priority Rule25-31
  • Q 25.28 : What is the absolute priority rule?25-31
  • Q 25.29 : What is the future of the absolute priority rule?25-32
  • : Lien Stripping25-32
  • Q 25.30 : What is lien stripping?25-32
  • Q 25.31 : Is there a way to avoid lien stripping?25-32
  • Q 25.32 : What is the effect of lien stripping?25-33
  • : Binding Plans25-33
  • Q 25.33 : How is a plan binding on creditors?25-33
  • : Litigation in Bankruptcy Cases25-33
  • : Generally25-33
  • Q 25.34 : What are adversary proceedings?25-33
  • Q 25.35 : What happens to the debtor’s litigation claims?25-34
    • Q 25.35.1 : Does the debtor have standing to pursue its pre-petition claims?25-35
  • Q 25.36 : What are the forum options for pending state court actions?25-35
  • : Types of Litigation Unique to Bankruptcy Cases25-36
  • Q 25.37 : What are avoidance actions?25-36
  • Q 25.38 : What are the particular claims asserted against mortgage lenders?25-36
  • : Discharge of Debts25-37
  • : Generally25-37
  • Q 25.39 : What is a bankruptcy “discharge”?25-37
  • : Potentially Dischargeable Debt25-38
  • Q 25.40 : What debts are potentially excepted from discharge?25-38
  • Q 25.41 : Does fraud and other misconduct lead to nondischargeable debt?25-38
  • Q 25.42 : Is credit card debt dischargeable?25-38
  • Q 25.43 : Is student loan debt dischargeable and is nondischargeability self-executing?25-39
  • Q 25.44 : Is marital debt dischargeable?25-39
  • Q 25.45 : Are unpaid taxes dischargeable?25-39
  • Q 25.46 : Are mortgage obligations dischargeable?25-39
  • Q 25.47 : Is a retail installment sales contract dischargeable?25-40
  • Q 25.48 : Is community debt discharged?25-40
  • Q 25.49 : May a debtor be denied discharge in its entirety?25-40
  • Q 25.50 : Does a creditor have the right to challenge the dischargeability of its debt or seek denial of discharge?25-41
  • Q 25.51 : What happens to a judgment for fraud obtained prior to the bankruptcy case?25-41
  • : Reaffirmation of a Pre-Petition Debt25-42
  • Q 25.52 : What is a “reaffirmation” and why would it be sought?25-42
  • Q 25.53 : What are the requirements for a valid reaffirmation agreement?25-42
  • Q 25.54 : May a debtor rescind a reaffirmation agreement?25-43
  • : Violations of Discharge Injunction25-43
  • Q 25.55 : What happens upon a violation of the discharge injunction?25-43
  • : Revoking a Discharge25-44
  • Q 25.56 : May a creditor seek to revoke discharge?25-44
Chapter 26: CFPB Enforcement
  • : Office of Enforcement26-2
  • Q 26.1 : What is the Consumer Financial Protection Bureau’s Office of Enforcement?26-2
    • Q 26.1.1 : Where does Enforcement sit within the CFPB’s organizational structure?26-2
    • Q 26.1.2 : Does Enforcement coordinate with the Offices of Fair Lending and Supervision?26-3
  • Q 26.2 : How is Enforcement organized?26-3
    • Q 26.2.1 : What is the Enforcement Policies and Procedures Manual?26-4
  • Q 26.3 : What is the scope of the CFPB’s enforcement authority?26-4
    • Q 26.3.1 : Who is a “covered person” for purposes of CFPB enforcement authority?26-5
    • Q 26.3.2 : Who is a “service provider” for purposes of CFPB enforcement authority?26-6
    • Q 26.3.3 : Are there any limitations on CFPB enforcement authority tied to the size of the financial institution?26-6
    • Q 26.3.4 : Are any entities excluded from CFPB enforcement authority?26-7
  • Q 26.4 : How might an institution become subject to a CFPB enforcement investigation?26-7
    • Q 26.4.1 : Under what circumstances might Enforcement decide to open an investigation on its own?26-7
    • Q 26.4.2 : What is a “Research Matter”?26-8
    • Q 26.4.3 : What is an “Investigation”?26-8
    • Q 26.4.4 : May Enforcement investigate an institution based on a referral from another regulatory body?26-9
    • Q 26.4.5 : May a matter be referred to Enforcement based upon findings made by Supervision in an examination?26-9
    • Q 26.4.6 : What is the Investigation Opening Memorandum?26-10
    • Q 26.4.7 : Will the CFPB advise whether a person or entity is the target of an investigation?26-10
    • Q 26.4.8 : What is a PARR letter?26-11
  • : Enforcement’s Tools and Powers26-12
  • Q 26.5 : What tools are available to Enforcement to conduct its investigations?26-12
    • Q 26.5.1 : When and to whom may the CFPB issue a civil investigative demand (CID)?26-13
    • Q 26.5.2 : What is the “Notice to Persons” form?26-13
    • Q 26.5.3 : Must the CFPB provide any documents to the respondent in an enforcement action?26-14
    • Q 26.5.4 : What categories of documents may the CFPB withhold from production?26-14
  • Q 26.6 : What is the CFPB’s authority to commence adjudicative or federal court proceedings?26-15
    • Q 26.6.1 : What is the CFPB’s authority to commence enforcement proceedings in federal court?26-15
    • Q 26.6.2 : What is the CFPB’s authority to commence enforcement proceedings in its administrative tribunal?26-16
    • Q 26.6.3 : What is the CFPB’s authority to issue or seek cease-and-desist orders?26-16
  • Q 26.7 : What relief may be granted in an administrative proceeding or court action brought by the CFPB?26-17
    • Q 26.7.1 : How does the CFPB determine the amount of civil money penalties to assess in an administrative proceeding or court action?26-17
    • Q 26.7.2 : What additional factors does the CFPB consider in determining the civil monetary penalty to seek?26-18
    • Q 26.7.3 : Does the CFPB allow parties to delay CMP payments, or be indemnified by others?26-19
    • Q 26.7.4 : What is the Civil Penalty Fund?26-19
  • : Enforcement’s Investigations26-20
  • Q 26.8 : What is the process for responding to a CID?26-20
    • Q 26.8.1 : What happens during the Meet-and-Confer process?26-20
  • Q 26.9 : What is the process for challenging or modifying a CID?26-22
    • Q 26.9.1 : What must a petition to modify or set aside a CID contain?26-23
    • Q 26.9.2 : What are the potential consequences of filing a petition to modify or set aside a CID?26-23
    • Q 26.9.3 : How often has the CFPB granted a petition to modify or set aside a CID?26-24
  • Q 26.10 : What is the process for an investigational hearing?26-25
    • Q 26.10.1 : Will the witness be given a copy of the transcript?26-27
  • Q 26.11 : Is information provided to Enforcement in an investigation confidential?26-28
  • Q 26.12 : Will the CFPB provide notice to the subject of an intended enforcement action prior to initiating such proceedings?26-29
    • Q 26.12.1 : Where the CFPB does provide notice, what is that process called?26-29
  • Q 26.13 : What is responsible conduct?26-30
    • Q 26.13.1 : What is the standard for responsible conduct?26-30
    • Q 26.13.2 : How does the CFPB define “self-policing”?26-31
    • Q 26.13.3 : How does the CFPB define “cooperation”?26-31
    • Q 26.13.4 : How does the CFPB define “remediation”?26-32
    • Q 26.13.5 : How does the CFPB define “self-reporting”?26-32
  • Q 26.14 : What actions may the CFPB take at the end of an investigation?26-33
    • Q 26.14.1 : How does the CFPB formally close a research matter or an investigation?26-33
    • Q 26.14.2 : Does the CFPB advise when an investigation is being closed?26-34
  • : CFPB Enforcement to Date26-34
  • Q 26.15 : Is there a time limitation in which the CFPB must bring an enforcement action?26-34
  • Q 26.16 : How has Enforcement relied on its UDAAP authority?26-35
    • Q 26.16.1 : What is an unfair or deceptive act or practice?26-35
    • Q 26.16.2 : What is an abusive practice?26-35
    • Q 26.16.3 : To what extent has the CFPB used its UDAAP authority for violations of enumerated statutes?26-36
    • Q 26.16.4 : To what extent has the CFPB used its UDAAP authority where enumerated statutes cannot apply?26-36
    • Q 26.16.5 : How has the CFPB used its abusiveness authority?26-37
  • Q 26.17 : Which industries, products or practices has Enforcement targeted?26-38
  • Q 26.18 : What types of actors has Enforcement pursued in its enforcement actions?26-40
    • Q 26.18.1 : Does Enforcement pursue only institutions of a particular size or nature?26-40
    • Q 26.18.2 : Does Enforcement pursue institutions for assisting in another person’s violations of federal consumer financial law?26-40
    • Q 26.18.3 : Does Enforcement pursue individuals?26-41
  • Q 26.19 : Has Enforcement coordinated with other federal or state regulatory agencies?26-42
    • Q 26.19.1 : Does the CFPB coordinate with other federal regulatory authorities?26-42
    • Q 26.19.2 : Does the CFPB coordinate with state regulatory authorities?26-44
    • Q 26.19.3 : Has the CFPB announced enforcement actions undertaken in coordination with other federal regulators or state authorities?26-45
  • Q 26.20 : How often does Enforcement litigate in administrative or federal court?26-46
    • Q 26.20.1 : How does the CFPB proceed in an administrative enforcement proceeding?26-46
    • Q 26.20.2 : How does the CFPB proceed in federal court litigation?26-47
Chapter 27: State Licensing
  • : Licensing27-3
  • : Basics of Licensing27-3
  • Q 27.1 : What activities require a license?27-3
  • Q 27.2 : What products and services are subject to licensing?27-5
    • Q 27.2.1 : What is a residential mortgage loan?27-5
    • Q 27.2.2 : What is a consumer loan?27-6
    • Q 27.2.3 : What is a small loan?27-6
    • Q 27.2.4 : What is a debt collector or debt collection agency?27-6
    • Q 27.2.5 : What activities potentially might require our company to obtain a money transmitter license?27-7
    • Q 27.2.6 : What activities typically require an entity to be licensed as a check casher?27-7
    • Q 27.2.7 : What is a payday loan or short-term, small-dollar loan?27-8
    • Q 27.2.8 : What is a sales finance company?27-8
    • Q 27.2.9 : What is virtual currency?27-9
  • Q 27.3 : What entities are typically exempt from licensing?27-10
  • Q 27.4 : What is the interplay between licensing and usury laws?27-10
  • Q 27.5 : What is the jurisdictional basis for a state to require that a person be licensed?27-11
  • : Basics of the NMLS27-11
  • Q 27.6 : What is the NMLS?27-11
    • Q 27.6.1 : What types of licenses are issued through the NMLS?27-12
    • Q 27.6.2 : What is an NMLS Record?27-13
    • Q 27.6.3 : What is the NMLS Consumer Access website?27-13
    • Q 27.6.4 : What is NMLS 2.0?27-13
  • : The Consumer Financial Protection Bureau27-14
  • Q 27.7 : What is the role of the CFPB in licensing?27-14
  • : State Mortgage Licenses27-15
  • : Basics of State Mortgage Licenses27-15
  • Q 27.8 : What is a state mortgage license?27-15
    • Q 27.8.1 : Is a license required in order to make residential mortgage loans?27-15
    • Q 27.8.2 : Is a license required in order to broker residential mortgage loans?27-15
    • Q 27.8.3 : Is a license required in order to service residential mortgage loans?27-16
    • Q 27.8.4 : Is a license required in order to process or underwrite residential mortgage loans for third parties?27-16
    • Q 27.8.5 : Is a license required in order to buy, sell, or hold already-funded and closed residential mortgage loans?27-16
    • Q 27.8.6 : Is a license required in order to conduct lead generation activities?27-16
  • Q 27.9 : What are the ramifications of conducting business without the appropriate license approval?27-17
  • Q 27.10 : Can entities or branch locations that are outside the United States be licensed to conduct financial services activities?27-17
  • : Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (the “SAFE Act”)27-18
  • Q 27.11 : What is the SAFE Act?27-18
    • Q 27.11.1 : Pursuant to the SAFE Act, who is permitted to register as a Mortgage Loan Originator?27-18
    • Q 27.11.2 : What requirements must an individual meet in order to be registered as a Mortgage Loan Originator?27-19
    • Q 27.11.3 : Pursuant to the SAFE Act, who is required to be licensed as a Mortgage Loan Originator?27-19
    • Q 27.11.4 : Are there any individuals who are exempt from registration or licensing requirements under the federal SAFE Act?27-19
    • Q 27.11.5 : What are “administrative or clerical tasks” for purposes of the SAFE Act?27-20
    • Q 27.11.6 : What requirements must an individual meet in order to be licensed as a Mortgage Loan Originator?27-20
    • Q 27.11.7 : What is the Uniform State Test?27-21
    • Q 27.11.8 : After an individual holds a state mortgage loan originator license, is he or she required to complete any continuing education requirements?27-22
    • Q 27.11.9 : Does the SAFE Act require loan processors and underwriters to be individually licensed as mortgage loan originators?27-22
    • Q 27.11.10 : Does the SAFE Act require individuals who engage in loss mitigation and loan modification activities on behalf of their mortgage servicer employer to be licensed or registered?27-23
    • Q 27.11.11 : What is an individual’s Unique Identifier?27-23
    • Q 27.11.12 : Why did states pass their own versions of the SAFE Act?27-24
    • Q 27.11.13 : Are there differences between the federal SAFE Act and the state versions of the SAFE Act?27-24
    • Q 27.11.14 : What is the primary difference between the federal SAFE Act and the state versions of the SAFE Act?27-24
    • Q 27.11.15 : What agencies are responsible for oversight of the SAFE Act?27-25
    • Q 27.11.16 : Are there regulations that have been promulgated regarding the federal SAFE Act?27-25
  • : Obligations of State Licensed Mortgage Companies and Individuals27-26
  • Q 27.12 : What obligations arise by holding a state mortgage license?27-26
  • Q 27.13 : What is the Mortgage Call Report?27-26
  • Q 27.14 : Which regulatory agencies have authority to examine state-licensed mortgage companies?27-27
    • Q 27.14.1 : What is a Multi-State Mortgage Examination?27-27
    • Q 27.14.2 : What resources should be consulted to prepare for future examinations?27-28
  Index

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