AFIP CERTIFICATION EXAM
QUESTIONS AND ANSWERS 100%
CORRECT
FTC fine amount - ANSWER-$46,517
UDAP - ANSWER-Unfair and Deceptive Acts and Practices
3 elements of a contract - ANSWER-offer, acceptance, consideration
2 ways to protect the finance source (involving insurance) - ANSWER-Force-place
insurance, Accelerate the balance
Force-place insurance - ANSWER-Coverage premium is forced into the car payment
Accelerate the balance - ANSWER-Make the full loan amount due & payable
Right of Recission - ANSWER-ability for someone to terminate a contract ("cooling off")
In a RISA who owns the vehicle? - ANSWER-The customer
On a leased vehicle who owns the vehicle? - ANSWER-The lessor
Security Interest - ANSWER-A creditor's right to use collateral to recover a debt.
Reg Z on TILA requires what 6 disclosures - ANSWER-1) APR
2) Finance Charge
3) Amount Financed
4) Total Payments
5) Total Sales Price
6) Payment Schedule
Total Sales Price on RISA includes... - ANSWER-1) Total number of cash payments
2) Cash Down
3) Net trade-in
TILA stands for __________, and the Reg associated with it is Reg _____ - ANSWER-
Truth in Lending Act; Reg Z
When referring to the TILA box on the contract, what information is disclosed for
Payments? - ANSWER-The # of payments, the amount of each payment, and the due
date
, Disclosing the Contract - state specific - at the time of consummation, the contract is
between these 2 parties: - ANSWER-Customer & selling dealer
Deferred Down Payment - when dealing with a Hold Check, these 4 things must be
followed: - ANSWER-- payment must be processed before the 2nd scheduled monthly
payment
- amount cannot be included in Amt. Financed
- not subjected to a finance charge
- not recorded on the contract (except in California**)
Negative Equity - two things you cannot do: - ANSWER-- increase the value of vehicle
to bury negative equity
- record a negative amount on the Down Payment line
2 types of Negative Equity methods - ANSWER-Gross & Net
TILA/Reg Z violation penalties: individual - ANSWER-- $5000
- 1 year jail
- combination of both
TILA/Reg Z violation penalties: dealer - ANSWER-- Plaintiff monetary damages
- attorney fees
- court costs
CLA stands for _______ and supports Reg _____ - ANSWER-Consumer Leasing Act;
Reg M
Who is the lessee? Who is the lessor? Who owns the vehicle during the lease? -
ANSWER-- Customer is lessee
- Leasing company is lessor
- The Lessor owns vehicle during the lease.
The total amt. being paid on a lease contract is referred to as _________ - ANSWER-
Gross cap cost
Negative Equity - Gross Amt. method - ANSWER-- negative equity —-> addt'l amt.
financed line
- down pmt. —> down pmt. line
Negative Equity - Net Amt. method - ANSWER-- negative equity —-> subtract cash
down pmt. ... ttl goes on the addt'l amt. financed line
- down pmt. gets absorbed, so $0 goes on down pmt. line - ***** OR if the down pmt. is
more than the negative equity, the total amt. (equity minus cash) goes on the down pmt.
line
QUESTIONS AND ANSWERS 100%
CORRECT
FTC fine amount - ANSWER-$46,517
UDAP - ANSWER-Unfair and Deceptive Acts and Practices
3 elements of a contract - ANSWER-offer, acceptance, consideration
2 ways to protect the finance source (involving insurance) - ANSWER-Force-place
insurance, Accelerate the balance
Force-place insurance - ANSWER-Coverage premium is forced into the car payment
Accelerate the balance - ANSWER-Make the full loan amount due & payable
Right of Recission - ANSWER-ability for someone to terminate a contract ("cooling off")
In a RISA who owns the vehicle? - ANSWER-The customer
On a leased vehicle who owns the vehicle? - ANSWER-The lessor
Security Interest - ANSWER-A creditor's right to use collateral to recover a debt.
Reg Z on TILA requires what 6 disclosures - ANSWER-1) APR
2) Finance Charge
3) Amount Financed
4) Total Payments
5) Total Sales Price
6) Payment Schedule
Total Sales Price on RISA includes... - ANSWER-1) Total number of cash payments
2) Cash Down
3) Net trade-in
TILA stands for __________, and the Reg associated with it is Reg _____ - ANSWER-
Truth in Lending Act; Reg Z
When referring to the TILA box on the contract, what information is disclosed for
Payments? - ANSWER-The # of payments, the amount of each payment, and the due
date
, Disclosing the Contract - state specific - at the time of consummation, the contract is
between these 2 parties: - ANSWER-Customer & selling dealer
Deferred Down Payment - when dealing with a Hold Check, these 4 things must be
followed: - ANSWER-- payment must be processed before the 2nd scheduled monthly
payment
- amount cannot be included in Amt. Financed
- not subjected to a finance charge
- not recorded on the contract (except in California**)
Negative Equity - two things you cannot do: - ANSWER-- increase the value of vehicle
to bury negative equity
- record a negative amount on the Down Payment line
2 types of Negative Equity methods - ANSWER-Gross & Net
TILA/Reg Z violation penalties: individual - ANSWER-- $5000
- 1 year jail
- combination of both
TILA/Reg Z violation penalties: dealer - ANSWER-- Plaintiff monetary damages
- attorney fees
- court costs
CLA stands for _______ and supports Reg _____ - ANSWER-Consumer Leasing Act;
Reg M
Who is the lessee? Who is the lessor? Who owns the vehicle during the lease? -
ANSWER-- Customer is lessee
- Leasing company is lessor
- The Lessor owns vehicle during the lease.
The total amt. being paid on a lease contract is referred to as _________ - ANSWER-
Gross cap cost
Negative Equity - Gross Amt. method - ANSWER-- negative equity —-> addt'l amt.
financed line
- down pmt. —> down pmt. line
Negative Equity - Net Amt. method - ANSWER-- negative equity —-> subtract cash
down pmt. ... ttl goes on the addt'l amt. financed line
- down pmt. gets absorbed, so $0 goes on down pmt. line - ***** OR if the down pmt. is
more than the negative equity, the total amt. (equity minus cash) goes on the down pmt.
line
