Practice Test Geeks(CCM) Certified Credit Manager Practice Test
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Credit Law and Regulations Flashcards

7 cards from real CCM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Credit Law and Regulations flashcards as text

  1. Under the Equal Credit Opportunity Act (ECOA), which of the following is a prohibited basis for denying business credit?

    Answer: Race or national origin

    ECOA prohibits credit discrimination based on race, color, religion, national origin, sex, marital status, age, or because someone receives public assistance.

  2. The Robinson-Patman Act primarily concerns which aspect of credit and business transactions?

    Answer: Price discrimination between competing purchasers

    The Robinson-Patman Act prohibits sellers from charging different prices to competing buyers for goods of like grade and quality when the effect may substantially lessen competition.

  3. Which section of the Uniform Commercial Code (UCC) governs the sale of goods and is most relevant to trade credit transactions?

    Answer: Article 2

    UCC Article 2 governs contracts for the sale of goods, making it directly applicable to trade credit transactions between businesses.

  4. A creditor receives a notice that a debtor has filed for Chapter 11 bankruptcy. Which immediate legal obligation arises?

    Answer: Cease all collection activity under the automatic stay

    The automatic stay under 11 U.S.C. § 362 immediately prohibits creditors from continuing collection efforts upon a bankruptcy filing.

  5. Under UCC Article 9, a 'purchase money security interest' (PMSI) in inventory gives the secured creditor what special advantage?

    Answer: Superpriority over prior perfected security interests if proper notice is given

    A PMSI in inventory can achieve superpriority over earlier perfected security interests if the PMSI holder notifies prior secured parties and perfects before delivery.

  6. The Sarbanes-Oxley Act (SOX) most directly affects credit managers by requiring:

    Answer: Greater accuracy and transparency in financial reporting that credit decisions rely on

    SOX strengthens financial reporting integrity, which credit managers rely on when analyzing customer financial statements to make credit decisions.

  7. Which legal concept allows a creditor to hold a debtor's property as security until a debt is satisfied, without a written security agreement?

    Answer: Common law lien

    A common law lien (or possessory lien) allows a creditor in possession of a debtor's property to retain it until the related debt is paid.