Commercial Lending and Compliance Expectations

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Question 1 of 10

1. Question
1. For the purposes of Regulation B, a completed application for a commercial loan is required to have 6 pieces of information which are the consumer’s name, the consumer’s income, the consumer’s social security number to obtain a credit report, the property address, an estimate of the value of the property, and the mortgage loan amount sought.
a. True
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b. False
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Question 2 of 10

2. Question
1. In determining whether credit to finance an acquisition – such as securities, antiques, or art – is primarily for business or commercial purposes (as opposed to a consumer purpose), the following factors should be considered:
a. The relationship of the borrower's primary occupation to the acquisition. The more closely related, the more likely it is to be business purpose
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b. The degree to which the borrower will personally manage the acquisition. The more personal involvement there is, the more likely it is to be business purpose.
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c. The ratio of income from the acquisition to the total income of the borrower. The higher the ratio, the more likely it is to be business purpose.
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d. All of the above
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Question 3 of 10

3. Question
1. Which of the following are not considered commercial or business credit under Reg B?
a. Public utilities credit and Securities Credit
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b. Incidental credit and Government Credit
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c. None of the above
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d. All of the above
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Question 4 of 10

4. Question
1. Regulation B generally requires creditors to retain written or recorded information in connection with a commercial credit application for ___________ after the date that the applicant learned of the action taken on the application
a. 12 months
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b. 3 months
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c. 24 months
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d. 5 years
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Question 5 of 10

5. Question
1. When it comes to the Fair Credit Reporting Act (FCRA):
a. The FCRA is not applicable to commercial loans in any manner
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b. Permissible purpose is not required for consumer reports for commercial loans
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c. The FCRA is applicable to consumer reports for commercial loans but only to primary borrowers for a commercial loan, not guarantors.
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d. The FCRA is applicable to consumer reports for commercial loans to all individuals who are personally liable on commercial credit.
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Question 6 of 10

6. Question
1. The Flood Disaster Protection Act (FDPA):
a. Requires all contents of a commercial structure to be insured, including the commercial structure itself, since the commercial structure and its contents are so inherently intertwined.
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b. Requires all contents of a commercial structure to be insured regardless of whether the commercial structure in which the contents are in is securing the loan.
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c. All of the above
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d. None of the above.
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Question 7 of 10

7. Question
1. For a bank’s Customer Identification Program (CIP), since a customer is a “person”, banks are not required to have a CIP as it is solely the bank’s discretion to have such a program in place:
a. True
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b. False
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Question 8 of 10

8. Question
1. Regulation E protections apply to commercial account holders.
a. True
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b. False
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Question 9 of 10

9. Question
1. The current Beneficial Ownership requirements for financial institutions can apply to:
a. Limited Liability Corporations, Limited Liability Partnerships, sole proprietorships, s-corps and c-corps
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b. Limited Liability Corporations, Limited Liability Partnerships, sole proprietorships, s-corps, c-corps, and unincorporated associations
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c. Limited Liability Corporations, Limited Liability Partnerships, s-corps, and c-corps
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d. Beneficial ownership does not apply to commercial credit
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Question 10 of 10

10. Question
1. Generally, the provisions of Regulation B do not apply to commercial credit.
True
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False
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