AFIP - Basic Certification Course
1. The ________ issues UDAP violations to dealers, the CPFB, FTC
________ issues UDAAP violations to dealers.
2. (True/False) If circumstances require that a second False
lease agreement be executed - the customer must
be recontracted - the date recorded on the second
agreement must be the date of the original contract.
3. Which of the following events, if any, can terminate an A. Death or insan-
offer? ity of an offeree or
offeror
4. What is "consideration" as it applies to a contract? A. The require-
ment that each
party to the
contract receives
something of val-
ue in exchange for
what is given
5. If a customer is re-contracted five days after the origi- B. As an entire-
nal agreement was executed, how should the second ly new agreement,
agreement be treated? with the date the
second contract is
executed record-
ed on the install-
ment sale agree-
ment.
6. (True/False) TILA/Reg Z treats "loans" and "credit False
sales" the same way since they are both essentially
a promise to pay.
7. Although not specifically required by the TILA or Reg True
Z., an installment sale contract may contain an accel-
eration clause. This is a contract provision that allows
the funding source who accepted the assignment of
the installment sale agreement to require the cus-
, AFIP - Basic Certification Course
tomer to pay all or part of the outstanding balance if
certain requirements are not met.
8. The CFPB issues UDAAP violations. UDAAP stands C. Unfair, Decep-
for: tive, Abusive, Acts
or Practices
9. A contract can be defined as an agreement that in- C. A promise or set
cludes: of promises that
the law enforces
or protects
10. Which of the following is considered a "credit sale" B. Karl arranges
transaction under TILA/Reg Z? funding through
the F&I manager
for a vehicle pur-
chased at a deal-
ership.
11. What is an acceleration clause? B. If the cus-
tomer defaults un-
der the contract,
the lender can
make the full out-
standing balance
due and payable
12. An installment sale contract may contain a provision A. force place
that allows the lender to _______ property insurance
if the customer fails to obtain insurance or lets it
lapse.
13. What do the letters in UDAP stand for? E. Unfair, Decep-
tive, Acts, Prac-
tices
14. What are the three required elements of a contract? D. An offer, accep-
tance, and consid-
eration.
, AFIP - Basic Certification Course
15. What are the criteria for "acceptance" of an offer? D. All of the above
16. The __________ issues UDAP violations to dealers, A. CFPB, FTC
the __________ issues UDAAP violations to dealers.
17. (True/False) The dealer is the creditor in a typical True
credit transaction.
18. As noted in the Truth in Lending Act and Reg. Z, if the D. None of the
customer owes more on the trade-in than the used above
car manager allowed, should the F&I manager do?
19. Which of the following transactions are NOT regula- D. Both A and C
tion by TILA/Reg Z?
20. (True/False) True
With the exception of some Precomputed Interest
contracts used by secondary finance sources, all
other installment sales contracts are simple interest
or interest-bearing contracts. The following is a lay-
man's explanation of a simple interest installment
sale transaction. In a precomputed contract the fi-
nance charge is computed on the assumption the
contract will run full term. If the customer terminates
the agreement during the repayment term, he will
receive a refund of the unearned premium.
In a simple interest- or interest-bearing installment
sale agreement, the finance charge is computed daily
and paid monthly throughout the term of the agree-
ment. If the customer pays-off the vehicle before the
scheduled end of the contract there is unearned fi-
nance charge money to refund, but it has been each
month the contract has been in force. There is no
refund of the unearned finance charge.
21. Which of the following regulations implements the D. Regulation Z
Truth in Lending Act?
1. The ________ issues UDAP violations to dealers, the CPFB, FTC
________ issues UDAAP violations to dealers.
2. (True/False) If circumstances require that a second False
lease agreement be executed - the customer must
be recontracted - the date recorded on the second
agreement must be the date of the original contract.
3. Which of the following events, if any, can terminate an A. Death or insan-
offer? ity of an offeree or
offeror
4. What is "consideration" as it applies to a contract? A. The require-
ment that each
party to the
contract receives
something of val-
ue in exchange for
what is given
5. If a customer is re-contracted five days after the origi- B. As an entire-
nal agreement was executed, how should the second ly new agreement,
agreement be treated? with the date the
second contract is
executed record-
ed on the install-
ment sale agree-
ment.
6. (True/False) TILA/Reg Z treats "loans" and "credit False
sales" the same way since they are both essentially
a promise to pay.
7. Although not specifically required by the TILA or Reg True
Z., an installment sale contract may contain an accel-
eration clause. This is a contract provision that allows
the funding source who accepted the assignment of
the installment sale agreement to require the cus-
, AFIP - Basic Certification Course
tomer to pay all or part of the outstanding balance if
certain requirements are not met.
8. The CFPB issues UDAAP violations. UDAAP stands C. Unfair, Decep-
for: tive, Abusive, Acts
or Practices
9. A contract can be defined as an agreement that in- C. A promise or set
cludes: of promises that
the law enforces
or protects
10. Which of the following is considered a "credit sale" B. Karl arranges
transaction under TILA/Reg Z? funding through
the F&I manager
for a vehicle pur-
chased at a deal-
ership.
11. What is an acceleration clause? B. If the cus-
tomer defaults un-
der the contract,
the lender can
make the full out-
standing balance
due and payable
12. An installment sale contract may contain a provision A. force place
that allows the lender to _______ property insurance
if the customer fails to obtain insurance or lets it
lapse.
13. What do the letters in UDAP stand for? E. Unfair, Decep-
tive, Acts, Prac-
tices
14. What are the three required elements of a contract? D. An offer, accep-
tance, and consid-
eration.
, AFIP - Basic Certification Course
15. What are the criteria for "acceptance" of an offer? D. All of the above
16. The __________ issues UDAP violations to dealers, A. CFPB, FTC
the __________ issues UDAAP violations to dealers.
17. (True/False) The dealer is the creditor in a typical True
credit transaction.
18. As noted in the Truth in Lending Act and Reg. Z, if the D. None of the
customer owes more on the trade-in than the used above
car manager allowed, should the F&I manager do?
19. Which of the following transactions are NOT regula- D. Both A and C
tion by TILA/Reg Z?
20. (True/False) True
With the exception of some Precomputed Interest
contracts used by secondary finance sources, all
other installment sales contracts are simple interest
or interest-bearing contracts. The following is a lay-
man's explanation of a simple interest installment
sale transaction. In a precomputed contract the fi-
nance charge is computed on the assumption the
contract will run full term. If the customer terminates
the agreement during the repayment term, he will
receive a refund of the unearned premium.
In a simple interest- or interest-bearing installment
sale agreement, the finance charge is computed daily
and paid monthly throughout the term of the agree-
ment. If the customer pays-off the vehicle before the
scheduled end of the contract there is unearned fi-
nance charge money to refund, but it has been each
month the contract has been in force. There is no
refund of the unearned finance charge.
21. Which of the following regulations implements the D. Regulation Z
Truth in Lending Act?
