AFIP CERTIFICATION EXAMS SCRIPT UPDATED QUESTIONS
AND ANSWERS SURE A+
✔✔The adverse action reporting requirements for Notices issued in accordance with the
FCRA must contain: - ✔✔a. A statement that the adverse credit decision was based in
whole or in part on information obtained from a credit reporting agency.
b. The contact information for the credit reporting agency that provided the report.
c. A statement that the credit reporting agency did not make the decision.
d. Notice of the consumer's right to obtain a free copy of his or her credit report from the
credit reporting agency, if requested within 60 days after receiving the Notice.
e. Notice of the customer's right to dispute the accuracy or completeness of any
consumer report information with the credit reporting agency.
✔✔In the course of a transaction, a customer completes a credit application. Based on
negative information contained in the application, a decision is made by an employee of
the dealership to deny credit - without securing a credit report or sending the deal to a
funding source for approval. The dealer: - ✔✔a. Has an obligation to issue an Adverse
Action Notice as required by the ECOA.
d. Has no obligation to issue an Adverse Action Notice under the FCRA.
✔✔In the course of a transaction, a customer completes a credit application and the
dealer secures a credit report. Based on negative information contained in the credit
report, a decision is made by an employee of the dealership to deny credit - without
sending the deal to a funding source for approval. The dealer: - ✔✔a. Has an obligation
to issue an Adverse Action Notice as required by the ECOA.
c. Has an obligation to issue an Adverse Action Notice as required by the FCRA.
✔✔(True/False) In negotiating the in-store funding arrangements, the customer will
accept the deal if he only has to tender $1,000 as a downpayment. Based on the
information contained in the customer's credit report and the parameters of the deal, a
funding source will only approve the transaction with a $3,000 downpayment - which the
customer will not agree to. Because the funding source approved the deal with only a
slight alteration in the terms, the dealer is not required to issue an Adverse Action
Notice. - ✔✔False
✔✔A customer completes a credit application and the dealer secures a credit report.
Due to the low credit score, the F&I person makes a maximum effort to find a lender
willing to accept the deal. The deal is shopped with five primary lending sources and
three secondary lenders. All eight deny the request for credit. In this case, the dealer
,has an obligation to the customer to _____________. - ✔✔The dealer has an obligation
to issue a Notice.
✔✔A funding source will approve the deal based on specific changes in the terms
originally submitted. If the customer agrees to the conditions of the counteroffer, the
dealer: - ✔✔Does not need to issue an Adverse Action Notice.
✔✔The F&I person is in possession of a credit application that is missing information,
without which the application cannot be sent for review. In this case, the F&I practitioner
can: - ✔✔Either:
a. Send the customer a written Adverse Action Notice within 30 days.
b. Send the customer a written Notice of Incompleteness, noting the items needed to
complete the application, establishing a reasonable time to respond, and stating that the
application will not be processed unless the requested information is provided.
✔✔The customer is purchasing a vehicle for use in his business, and corporate credit
information is used to complete the credit application. In this case, the F&I practitioner,
in accordance with the ECOA, must ask and record: - ✔✔Whether the business posts a
gross annual income of $1 million or less
✔✔Based on the customer's credit history, the request for credit is denied by all the
funding sources who reviewed the deal and no counteroffer was made. In this case, the
dealer issued a simplified Adverse Action Notice. Ninety days after receipt of the notice,
the customer makes a written request for an explanation as to why credit was denied.
The dealer: - ✔✔Has no obligation to comply with the request, although a business
decision might be made to honor it.
✔✔(True/False) According to the FCRA, a customer can bring a claim under the Act
seven years after the date on which the alleged violation occurred. - ✔✔False
✔✔The ECOA requires that specific documents be retained for: - ✔✔25 months from
the date of the application.
✔✔(True/False) A copy of the credit report used to evaluate the customer's credit
should be included in the documents that are kept on file to comply with the ECOA. -
✔✔True
✔✔(True/False) Under the ECOA, the Adverse Action Notice must include the specific
reason credit was denied - such as the applicant's delinquent credit obligations - or
disclose the applicant's right to a specific statement of the reasons if requested within
60 days of the Adverse Action Notice. - ✔✔True
,✔✔(True/False) A creditor must provide the consumer with an Adverse Action Notice
any time the creditor denies credit, or refuses to grant credit in substantially the amount
or the terms requested by the consumer. - ✔✔True
✔✔(True/False) Under the FCRA, an Adverse Action Notice must include the name,
address, and telephone number of the credit reporting agency that furnished the report,
along with a statement that the credit reporting agency was responsible for making the
decision to take adverse action, and that the consumer can contact the agency to find
out the specific reasons for the decisions. - ✔✔False
✔✔Violations of the ECOA can subject dealerships to liability for: - ✔✔a. Actual
damages suffered by consumers.
b. Punitive damages up to $10,000 in an individual action.
c. Punitive damages up to $500,000, or up to 1% of the dealership's net worth,
whichever is less, in class actions.
✔✔Willful violations of the FCRA can expose dealerships to liability for: - ✔✔a. Actual
damages suffered by consumers.
OR
b. Statutory damages of not less than $100, nor more than $1,000, per violation.
✔✔Willful violations of the FCRA can also expose dealerships to liability for: - ✔✔a.
Punitive damages.
b. Court costs.
c. Attorney's fees.
✔✔(True/False) Violations of the FCRA can expose dealerships to civil penalties in
actions brought by federal or state authorities. - ✔✔True
✔✔Negligent violations of the FCRA can expose dealerships to liability for: - ✔✔a.
Actual damages suffered by consumers.
b. Court costs.
c. Attorney's fees.
✔✔(True/False) Your dealership's Adverse Action Notices should be reviewed by
competent counsel. - ✔✔True
✔✔As it relates to vehicle installment funding and consumer leases, the dealer (is or
isn't) the creditor at the point in time the agreement is consummated. - ✔✔is
, ✔✔(True/False) It is illegal for a dealer to provide information about only sub-prime auto
finance programs to minority applicants while providing information on a wider variety of
auto finance programs to similarly situated non-minority applicants. - ✔✔True
✔✔(True/False) According to Regulation B, a transfer of information will be judged to be
a completed application - even if information is missing - if it provides the funding source
with all the information required to make a credit decision relative to the amount of
money requested and the parameters of the deal. - ✔✔False
✔✔Which act implements Regulation B? - ✔✔ECOA
✔✔It is permissible for a creditor to inquire about a customer's _______. - ✔✔-
Permanent residence
-Immigration Status
✔✔If credit is denied, a creditor must issue an adverse action notice within _______
days of receipt of a completed application. - ✔✔30
✔✔(True/False) In situations involving multiple applicants, ECOA requires that the
adverse action notice be issued to the primary applicant, while FCRA requires that it be
given to all applicants. Since most notices contain notifications required by both the
ECOA and FCRA, best practices suggest that funding sources issue notices to any
party submitting an application for credit. - ✔✔True
✔✔(True/False) A dealer is allowed to require a minority applicant to provide more
documentation to obtain credit than a similarly situated non-minority applicant. -
✔✔False
✔✔(True/False) If an F&I manager, as an integral part of his job, regularly participates
in a credit decision - for example, by determining the APR (as a function of the buy
rate), setting the payment terms (e.g., 24 or 36 months), establishing other terms (e.g.,
the amount paid down or the amount financed) - or regularly refers customers to direct
lenders, then he is deemed to be a "creditor." - ✔✔True
✔✔(True/False) In addition to federal discrimination rules, many states have similar
regulations with more extensive lists of prohibited practices. - ✔✔True
✔✔Categories of Credit History as Weighted in FICO Scores - ✔✔Payment History -
35%
Amounts Owed - 30%
Length of Credit History - 15%
New Credit - 10%
Types of Credit in Use - 10%
AND ANSWERS SURE A+
✔✔The adverse action reporting requirements for Notices issued in accordance with the
FCRA must contain: - ✔✔a. A statement that the adverse credit decision was based in
whole or in part on information obtained from a credit reporting agency.
b. The contact information for the credit reporting agency that provided the report.
c. A statement that the credit reporting agency did not make the decision.
d. Notice of the consumer's right to obtain a free copy of his or her credit report from the
credit reporting agency, if requested within 60 days after receiving the Notice.
e. Notice of the customer's right to dispute the accuracy or completeness of any
consumer report information with the credit reporting agency.
✔✔In the course of a transaction, a customer completes a credit application. Based on
negative information contained in the application, a decision is made by an employee of
the dealership to deny credit - without securing a credit report or sending the deal to a
funding source for approval. The dealer: - ✔✔a. Has an obligation to issue an Adverse
Action Notice as required by the ECOA.
d. Has no obligation to issue an Adverse Action Notice under the FCRA.
✔✔In the course of a transaction, a customer completes a credit application and the
dealer secures a credit report. Based on negative information contained in the credit
report, a decision is made by an employee of the dealership to deny credit - without
sending the deal to a funding source for approval. The dealer: - ✔✔a. Has an obligation
to issue an Adverse Action Notice as required by the ECOA.
c. Has an obligation to issue an Adverse Action Notice as required by the FCRA.
✔✔(True/False) In negotiating the in-store funding arrangements, the customer will
accept the deal if he only has to tender $1,000 as a downpayment. Based on the
information contained in the customer's credit report and the parameters of the deal, a
funding source will only approve the transaction with a $3,000 downpayment - which the
customer will not agree to. Because the funding source approved the deal with only a
slight alteration in the terms, the dealer is not required to issue an Adverse Action
Notice. - ✔✔False
✔✔A customer completes a credit application and the dealer secures a credit report.
Due to the low credit score, the F&I person makes a maximum effort to find a lender
willing to accept the deal. The deal is shopped with five primary lending sources and
three secondary lenders. All eight deny the request for credit. In this case, the dealer
,has an obligation to the customer to _____________. - ✔✔The dealer has an obligation
to issue a Notice.
✔✔A funding source will approve the deal based on specific changes in the terms
originally submitted. If the customer agrees to the conditions of the counteroffer, the
dealer: - ✔✔Does not need to issue an Adverse Action Notice.
✔✔The F&I person is in possession of a credit application that is missing information,
without which the application cannot be sent for review. In this case, the F&I practitioner
can: - ✔✔Either:
a. Send the customer a written Adverse Action Notice within 30 days.
b. Send the customer a written Notice of Incompleteness, noting the items needed to
complete the application, establishing a reasonable time to respond, and stating that the
application will not be processed unless the requested information is provided.
✔✔The customer is purchasing a vehicle for use in his business, and corporate credit
information is used to complete the credit application. In this case, the F&I practitioner,
in accordance with the ECOA, must ask and record: - ✔✔Whether the business posts a
gross annual income of $1 million or less
✔✔Based on the customer's credit history, the request for credit is denied by all the
funding sources who reviewed the deal and no counteroffer was made. In this case, the
dealer issued a simplified Adverse Action Notice. Ninety days after receipt of the notice,
the customer makes a written request for an explanation as to why credit was denied.
The dealer: - ✔✔Has no obligation to comply with the request, although a business
decision might be made to honor it.
✔✔(True/False) According to the FCRA, a customer can bring a claim under the Act
seven years after the date on which the alleged violation occurred. - ✔✔False
✔✔The ECOA requires that specific documents be retained for: - ✔✔25 months from
the date of the application.
✔✔(True/False) A copy of the credit report used to evaluate the customer's credit
should be included in the documents that are kept on file to comply with the ECOA. -
✔✔True
✔✔(True/False) Under the ECOA, the Adverse Action Notice must include the specific
reason credit was denied - such as the applicant's delinquent credit obligations - or
disclose the applicant's right to a specific statement of the reasons if requested within
60 days of the Adverse Action Notice. - ✔✔True
,✔✔(True/False) A creditor must provide the consumer with an Adverse Action Notice
any time the creditor denies credit, or refuses to grant credit in substantially the amount
or the terms requested by the consumer. - ✔✔True
✔✔(True/False) Under the FCRA, an Adverse Action Notice must include the name,
address, and telephone number of the credit reporting agency that furnished the report,
along with a statement that the credit reporting agency was responsible for making the
decision to take adverse action, and that the consumer can contact the agency to find
out the specific reasons for the decisions. - ✔✔False
✔✔Violations of the ECOA can subject dealerships to liability for: - ✔✔a. Actual
damages suffered by consumers.
b. Punitive damages up to $10,000 in an individual action.
c. Punitive damages up to $500,000, or up to 1% of the dealership's net worth,
whichever is less, in class actions.
✔✔Willful violations of the FCRA can expose dealerships to liability for: - ✔✔a. Actual
damages suffered by consumers.
OR
b. Statutory damages of not less than $100, nor more than $1,000, per violation.
✔✔Willful violations of the FCRA can also expose dealerships to liability for: - ✔✔a.
Punitive damages.
b. Court costs.
c. Attorney's fees.
✔✔(True/False) Violations of the FCRA can expose dealerships to civil penalties in
actions brought by federal or state authorities. - ✔✔True
✔✔Negligent violations of the FCRA can expose dealerships to liability for: - ✔✔a.
Actual damages suffered by consumers.
b. Court costs.
c. Attorney's fees.
✔✔(True/False) Your dealership's Adverse Action Notices should be reviewed by
competent counsel. - ✔✔True
✔✔As it relates to vehicle installment funding and consumer leases, the dealer (is or
isn't) the creditor at the point in time the agreement is consummated. - ✔✔is
, ✔✔(True/False) It is illegal for a dealer to provide information about only sub-prime auto
finance programs to minority applicants while providing information on a wider variety of
auto finance programs to similarly situated non-minority applicants. - ✔✔True
✔✔(True/False) According to Regulation B, a transfer of information will be judged to be
a completed application - even if information is missing - if it provides the funding source
with all the information required to make a credit decision relative to the amount of
money requested and the parameters of the deal. - ✔✔False
✔✔Which act implements Regulation B? - ✔✔ECOA
✔✔It is permissible for a creditor to inquire about a customer's _______. - ✔✔-
Permanent residence
-Immigration Status
✔✔If credit is denied, a creditor must issue an adverse action notice within _______
days of receipt of a completed application. - ✔✔30
✔✔(True/False) In situations involving multiple applicants, ECOA requires that the
adverse action notice be issued to the primary applicant, while FCRA requires that it be
given to all applicants. Since most notices contain notifications required by both the
ECOA and FCRA, best practices suggest that funding sources issue notices to any
party submitting an application for credit. - ✔✔True
✔✔(True/False) A dealer is allowed to require a minority applicant to provide more
documentation to obtain credit than a similarly situated non-minority applicant. -
✔✔False
✔✔(True/False) If an F&I manager, as an integral part of his job, regularly participates
in a credit decision - for example, by determining the APR (as a function of the buy
rate), setting the payment terms (e.g., 24 or 36 months), establishing other terms (e.g.,
the amount paid down or the amount financed) - or regularly refers customers to direct
lenders, then he is deemed to be a "creditor." - ✔✔True
✔✔(True/False) In addition to federal discrimination rules, many states have similar
regulations with more extensive lists of prohibited practices. - ✔✔True
✔✔Categories of Credit History as Weighted in FICO Scores - ✔✔Payment History -
35%
Amounts Owed - 30%
Length of Credit History - 15%
New Credit - 10%
Types of Credit in Use - 10%
