NEW CRCM EXAM 2025 QUESTIONS
AND ANSWERS
In which of the following transactions is a disclosure statement to the consumer required? -
ANS A $125,000 loan to purchase and secured by an unimproved lot on which the borrower
eventually plans to build a home for retirement
Which of the following charges is generally to be a prepaid finance charge? - ANS Points paid
by the borrower in cash at closing
Which of these transactions requires the earliest disclosure? - ANS A $200,000 loan with a
variable interest rate to purchase a residence
If an advertisement for a lender's mortgage loan product states that "we offer 15 and 30 year
loans," what additional disclosures are required by Regulation Z? - ANS The terms
repayment, amount of the down payment (in a credit sale), and the APR
For how long must a lender retain evidence of compliance with the Truth in Lending Act? -
ANS Two years after the disclosures are required to be made, except for mortgages, which
have a five year retention requirement
Which of the following closed-end loans is subject to the right of rescission? - ANS A home
improvement loan for the borrower's principal dwelling, secured by the dwelling
COPYRIGHT © 2025 THESTAR ALL RIGHTS RESERVED 1
,For how long may consumers exercise the right to rescind transactions in closed-end loans? -
ANS Three business days after the later of the consummation, delivery of notice of the right
to rescind, or delivery of required disclosures
Which of the following disclosures is NOT required on the itemization of amount financed? -
ANS An itemization of the various types of finance charges
Borrower A has a variable rate loan secured by his principal dwelling for a term of 10 years.
Which of the following is NOT a Truth in Lending requirement for his loan? - ANS Limiting the
number of interest rate increases in each calendar year
The State National Bank credit card program includes an annual fee that equals a percentage of
the average balance of the account during the previous year. Of the following statements,
which is true regarding the Truth in Lending requirements applicable to this fee? - ANS The
bank must disclose in the initial application or solicitation either the fee amount or the
percentage amount and identify the amount against which the percentage is based
Which statement is NOT true regarding the application disclosure made by the lender on a
home equity open-end plan? - ANS Disclosure must be in a form the borrower can keep
In an open-end account that is NOT a home equity plan, which of the following does NOT have
to provided to the consumer? - ANS A brochure with a transaction example of $1,000
balance for six months
When must a notice be received from a consumer in order to be considered a "billing error
notice"? - ANS Within 60 days after the first statement that reflected the error
Which statement is true regarding a consumer's right to rescind an open-end credit
transaction? - ANS Right of rescission applies only to transactions secured by the consumer's
principal dwelling
COPYRIGHT © 2025 THESTAR ALL RIGHTS RESERVED 2
,When a bank makes a rescindable closed-end home improvement loan to a consumer, to which
of the following may the bank advance funds before the end of the rescission period? -
ANS To an escrow account with a third-party escrow agent
First National Bank agreed to make a rescindable closed-end home improvement loan to Mr.
and Mrs. Smith. The Notice of the Right to Rescind was given to the Smiths on Tuesday at the
closing of the loan along with the material disclosures. The Smiths purchased a title policy and
paid for a property appraisal for the bank in connection with the transaction. A lien was filed
against the Smiths' home on Tuesday afternoon. The bank funded the loan on Friday morning
at the request of Mr. Smith by crediting the Smiths' joint checking account with the loan
proceeds. On Friday afternoon Mrs. Smith has a change of heart concerning the transaction and
deposits a rescission notice in the mail to the bank. The bank receives the notice on Tuesday
morning. All funds have been withdrawn from the account. What should the bank do? -
ANS Release the lien on the property immediately, then refund to the Smiths the amounts
they spend for the title policy and appraisal, and then demand repayment of the loan (without
interest)
A consumer customer reports to First National Bank's credit card department that his credit
card periodic statement contains an amount that is incorrect. What should the bank do? -
ANS Conduct an investigation and mail within 30 days an acknowledgement of the error
notice, a correction of the error, or a notice that there is no error
If a bank completes an investigation of an alleged billing error and determines that no billing
error occurred and the consumer owes all or part of the amount, what must the bank do? -
ANS Send the consumer a notice that explains why no billing error occurred
Which of the following situations is NOT considered a billing error? - ANS The inclusion of a
change for an item the quality of which dissatisfied the consumer
For which disclosure must a bank obtain a customer's affirmative consent before delivery? -
ANS An electronic disclosure statement on a car loan
What must a married couple do to waive their right of rescission on their residential property? -
ANS Sign a written statement indicating the reason for the waiver
COPYRIGHT © 2025 THESTAR ALL RIGHTS RESERVED 3
, A creditor receives a phone application for a home equity line of credit. Before the time period
for mailing out the early disclosure and the Regulation Z mandated brochure, the creditor
reviews the applicant's credit history and discovers the applicant will not qualify for the line of
credit due to a bankruptcy filing last year. Which of the following BEST describes how
Regulation Z treats this situation? - ANS If the credit denial was made within the period of
time Regulation Z allows for mailing the early disclosures and brochure, the creditor does not
have to send the early disclosures or the brochure
In determining a prepaid finance charge for a final APR calculation, a compliance officer notes
an unusual settlement agent fee. What should the compliance officer FIRST determine? -
ANS Whether the fee is charged in a comparable cash transaction
On January 10 ABC Bank decides to send an advertising piece to consumers in its local
community to promote its home equity lines of credit. The ad will be sent via email. The bank's
home equity product has an interest rate based upon the national prime rate plus a five
percentage margin. However, the bank is offering a lower promotional interest rate that is fixed
for six months. In the ad, the bank plans to disclose the promotional rate and the fact that it is
valid for six months from the date of loan closing. The bank will also disclose an actual APR
charged on this product during the previous November. The ad will also include a list of all the
fees required to close the loan and the maximum APR that can be charged under the plan. Will
this ad meet TILA requirements? - ANS No, the ad must disclose a rate used during the 30
days before the date the ad is transmitted
Which of the following features is acceptable in a high cost mortgage loan? - ANS A
prepayment payment penalty provision effective for the first year of the loan
If a loan is to be secured by a consumer's principal dwelling, which of the following actions is
prohibited with regard to an appraiser? - ANS The banker tells the appraiser that the
appraisal will need to show that the property is worth at least $100,000, or the bank will not be
able to make the loan.
COPYRIGHT © 2025 THESTAR ALL RIGHTS RESERVED 4
AND ANSWERS
In which of the following transactions is a disclosure statement to the consumer required? -
ANS A $125,000 loan to purchase and secured by an unimproved lot on which the borrower
eventually plans to build a home for retirement
Which of the following charges is generally to be a prepaid finance charge? - ANS Points paid
by the borrower in cash at closing
Which of these transactions requires the earliest disclosure? - ANS A $200,000 loan with a
variable interest rate to purchase a residence
If an advertisement for a lender's mortgage loan product states that "we offer 15 and 30 year
loans," what additional disclosures are required by Regulation Z? - ANS The terms
repayment, amount of the down payment (in a credit sale), and the APR
For how long must a lender retain evidence of compliance with the Truth in Lending Act? -
ANS Two years after the disclosures are required to be made, except for mortgages, which
have a five year retention requirement
Which of the following closed-end loans is subject to the right of rescission? - ANS A home
improvement loan for the borrower's principal dwelling, secured by the dwelling
COPYRIGHT © 2025 THESTAR ALL RIGHTS RESERVED 1
,For how long may consumers exercise the right to rescind transactions in closed-end loans? -
ANS Three business days after the later of the consummation, delivery of notice of the right
to rescind, or delivery of required disclosures
Which of the following disclosures is NOT required on the itemization of amount financed? -
ANS An itemization of the various types of finance charges
Borrower A has a variable rate loan secured by his principal dwelling for a term of 10 years.
Which of the following is NOT a Truth in Lending requirement for his loan? - ANS Limiting the
number of interest rate increases in each calendar year
The State National Bank credit card program includes an annual fee that equals a percentage of
the average balance of the account during the previous year. Of the following statements,
which is true regarding the Truth in Lending requirements applicable to this fee? - ANS The
bank must disclose in the initial application or solicitation either the fee amount or the
percentage amount and identify the amount against which the percentage is based
Which statement is NOT true regarding the application disclosure made by the lender on a
home equity open-end plan? - ANS Disclosure must be in a form the borrower can keep
In an open-end account that is NOT a home equity plan, which of the following does NOT have
to provided to the consumer? - ANS A brochure with a transaction example of $1,000
balance for six months
When must a notice be received from a consumer in order to be considered a "billing error
notice"? - ANS Within 60 days after the first statement that reflected the error
Which statement is true regarding a consumer's right to rescind an open-end credit
transaction? - ANS Right of rescission applies only to transactions secured by the consumer's
principal dwelling
COPYRIGHT © 2025 THESTAR ALL RIGHTS RESERVED 2
,When a bank makes a rescindable closed-end home improvement loan to a consumer, to which
of the following may the bank advance funds before the end of the rescission period? -
ANS To an escrow account with a third-party escrow agent
First National Bank agreed to make a rescindable closed-end home improvement loan to Mr.
and Mrs. Smith. The Notice of the Right to Rescind was given to the Smiths on Tuesday at the
closing of the loan along with the material disclosures. The Smiths purchased a title policy and
paid for a property appraisal for the bank in connection with the transaction. A lien was filed
against the Smiths' home on Tuesday afternoon. The bank funded the loan on Friday morning
at the request of Mr. Smith by crediting the Smiths' joint checking account with the loan
proceeds. On Friday afternoon Mrs. Smith has a change of heart concerning the transaction and
deposits a rescission notice in the mail to the bank. The bank receives the notice on Tuesday
morning. All funds have been withdrawn from the account. What should the bank do? -
ANS Release the lien on the property immediately, then refund to the Smiths the amounts
they spend for the title policy and appraisal, and then demand repayment of the loan (without
interest)
A consumer customer reports to First National Bank's credit card department that his credit
card periodic statement contains an amount that is incorrect. What should the bank do? -
ANS Conduct an investigation and mail within 30 days an acknowledgement of the error
notice, a correction of the error, or a notice that there is no error
If a bank completes an investigation of an alleged billing error and determines that no billing
error occurred and the consumer owes all or part of the amount, what must the bank do? -
ANS Send the consumer a notice that explains why no billing error occurred
Which of the following situations is NOT considered a billing error? - ANS The inclusion of a
change for an item the quality of which dissatisfied the consumer
For which disclosure must a bank obtain a customer's affirmative consent before delivery? -
ANS An electronic disclosure statement on a car loan
What must a married couple do to waive their right of rescission on their residential property? -
ANS Sign a written statement indicating the reason for the waiver
COPYRIGHT © 2025 THESTAR ALL RIGHTS RESERVED 3
, A creditor receives a phone application for a home equity line of credit. Before the time period
for mailing out the early disclosure and the Regulation Z mandated brochure, the creditor
reviews the applicant's credit history and discovers the applicant will not qualify for the line of
credit due to a bankruptcy filing last year. Which of the following BEST describes how
Regulation Z treats this situation? - ANS If the credit denial was made within the period of
time Regulation Z allows for mailing the early disclosures and brochure, the creditor does not
have to send the early disclosures or the brochure
In determining a prepaid finance charge for a final APR calculation, a compliance officer notes
an unusual settlement agent fee. What should the compliance officer FIRST determine? -
ANS Whether the fee is charged in a comparable cash transaction
On January 10 ABC Bank decides to send an advertising piece to consumers in its local
community to promote its home equity lines of credit. The ad will be sent via email. The bank's
home equity product has an interest rate based upon the national prime rate plus a five
percentage margin. However, the bank is offering a lower promotional interest rate that is fixed
for six months. In the ad, the bank plans to disclose the promotional rate and the fact that it is
valid for six months from the date of loan closing. The bank will also disclose an actual APR
charged on this product during the previous November. The ad will also include a list of all the
fees required to close the loan and the maximum APR that can be charged under the plan. Will
this ad meet TILA requirements? - ANS No, the ad must disclose a rate used during the 30
days before the date the ad is transmitted
Which of the following features is acceptable in a high cost mortgage loan? - ANS A
prepayment payment penalty provision effective for the first year of the loan
If a loan is to be secured by a consumer's principal dwelling, which of the following actions is
prohibited with regard to an appraiser? - ANS The banker tells the appraiser that the
appraisal will need to show that the property is worth at least $100,000, or the bank will not be
able to make the loan.
COPYRIGHT © 2025 THESTAR ALL RIGHTS RESERVED 4
