In actuality, a credit card is simply a loan from a lending institution (the issuing company) that pays the merchant when it receives a loan document (a credit card receipt) from the merchant. Does it appear the following are accurately disclosed: a. B. For example, payment for workmen's compensation insurance under either a compulsory or elective State statute are not considered payments for fringe benefits under the Act. FALSE. questions concerning plans for children should be asked before sanctioning credit. Code—The Savings Association Code of 1967 (7 P. S. §§ 6020-1—6020-254). In addition, if real estate prices appreciate, there can be capital gains. This type of consumer credit is found with most credit cards. Ann. consolidation loan, you exchange several smaller debts with varying due dates and interest rates for a single large loan with one interest rate and one monthly payment. Ann. Credit cards and open-end lines of credit are examples. The lending institution then sends the cardholder an invoice. Covered loan means a consumer credit transaction secured by property located within this state that is considered a mortgage under section 152 of the federal "Home Ownership and Equity Protection Act of 1994", 15 U.S.C. Open-End Loans. number of various types of accounts (credit cards, loans, mortgages, etc.) The change in the nature of these PPl who use less of their available credit, considered lower risk (30% ) Length of Credit History (15%) New Credit. For an open‑end credit plan, "total loan amount" means the borrower's initial maximum credit limit. c. Reverse mortgage transactions. Lenders incorporate the expected rate of inflation when deciding how much interest to charge. The FCRA lays out the following basic consumer rights: If a credit report is used against you – such as to deny credit, insurance or employment – you have a right to know about it. rated based on the number of recently opened accounts and the number of recent credit inquiries (10%) Types of credit used. For each consumer credit transaction other than under an open end credit plan, the creditor shall disclose each of the following items, to the extent applicable: (1) … The consumer is able to make purchases on a credit card but must pay the outstanding amount when it becomes due. – A high‑cost home loan shall be subject to the following limitations: (1) No call provision. First, the good news. In this example, the transaction is an open-end line of credit under Regulation C, provided the other requirements of § 1003.2(o) are met. With a debt . §§16a-1-301[17] & 16a-3-308a) In addition, any mortgage may be subject to the UCCC by contract (see Kan. Stat. Similarly, assume a transaction in which the person extending open-end credit is a financial institution under § 1003.2(g) but is not a creditor under Regulation Z, § 1026.2(a)(17). if the credit is refused, the creditor, on demand, must disclose the reasons for rejection. The following words and terms, when used in this chapter have the following meanings, unless the context clearly indicates otherwise: Association—A savings association subject to the Code. ARTICLE 4. Approximately one-fifth of loans granted by consumer finance companies are for debt consolidation. Consumer credit classified as a loss—Closed-end consumer credit delinquent 120 days or more—5 monthly payments or more—and open-end consumer credit delinquent 180 days or more—seven zero-billing cycles or more. In this kind of credit the lender extends credit for use by the consumer, with an outside limit that depends on the debtor’s credit history and ability to handle the debt repayment. Thus, Choice A is the best one offered. Generally, the MAPR for open-end credit should be calculated following the rules for calculating the effective APR for a billing cycle as set for in 12 CFR 1026.14 (c) and (d) of Regulation Z. The finance charge pays the business in part, for its expense in keeping track of your account and its balance. sec. Finance Charge Calculation (226.4) b. the creditor must ask all credit applicants for a statement of marital status. (see Kan. U.C.C. There is a maximum amount of credit that you can use, called your line of credit. If the consumer fails to settle the outstanding amount on the credit card, he/she would be charged interest until the amount is paid off. (b) Limitations. (a) Issuance of credit cards. alimony received and child support payments are not considered sources of income. For all open-end credit, a consumer's payment must be credited on the date of receipt as long as it is received before 5 p.m. The following points concern those commercial, closed-end mortgage loans or open-end lines of credit that are not covered by HMDA 6: 1. The final rule now expressly excludes loans or lines of credit to be used primarily for agricultural purposes. According to the FACT Act, which of the following acts could be considered a failure to secure private information? 2. Equity REIT investments typically generate good dividend income, because the REIT distributes most of the net rental income to shareholders. The Rule applies to any consumer credit transaction secured by a dwelling, except an open-end credit plan, timeshare plan, reverse mortgage, or temporary loan or ‘‘bridge’’ loan with a term of 12 months or less.5 It appears that the Rule applies to purchase money and refinances, but not modifications of existing mortgages. A credit card is an example of an open-end consumer loan. The law applies to “open end credit accounts.” These include credit cards and revolving charge accounts. Extension of credit. 2. (e) A participation without recourse is considered to be an extension of credit by the participating bank, not by the originating bank. Open-end credit plans (such as home equity lines of credit, or HELOCs); Time-share plans; ... You must consider the following eight underwriting standards when making an ATR determination: 10 . Which of the following actions is not allowed? Closed-end loan . ; You have a right to know what information your credit reports contain. Unless you pay off the debt in full each month, you will often have to pay a high-rate of interest or other kinds of finance charges for the use of credit. Bloom's: Comprehension Difficulty: Medium Learning Objective: 4 Topic: Cost of credit 43. Credit cards are classified as revolving credit because you have a set credit limit, you can use as much or as little of the credit limit as you want, any balance on the account “revolves” to the next month and the account remains open when the balance is zero. Annual Percentage Rate (APR) (226.22) (Considered accurate if within 1/8 of 1%.) For the purposes of computing delinquency, a payment of 90% or more of the contractual payment will be considered as a full payment. The finance charge (interest) is the price you pay for being granted credit. However, a creditor may impose reasonable payment requirements, such as specifying the address to which payments must be sent or that payment be made in U.S. dollars. open-end credit evolved. Construction - The best interest of the consumer shall be considered in the interpretation and implementation of the provisions of this Act, including its implementing rules and regulations. What Is the Purpose of the Fair Credit Billing Act? 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