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
Under the Fair Debt Collection Practices Act (FDCPA), which entity is primarily regulated by the statute?
Answer: Third-party debt collectors
The FDCPA primarily regulates third-party debt collectors, not original creditors collecting their own consumer debts.
A creditor who sold goods on credit discovers the buyer committed fraud in obtaining the credit. Under the UCC, the seller may seek to:
Answer: Reclaim the goods if demand is made within a reasonable time, generally 10 days
UCC § 2-702 allows a seller to reclaim goods sold on credit if the buyer was insolvent and the seller demands return within a reasonable time, with 10 days as a statutory guideline.
Which of the following best describes a 'preference payment' in the context of bankruptcy law?
Answer: A payment made to a creditor within 90 days before bankruptcy that improves their position over other creditors
A preference is a payment made to a creditor within 90 days before bankruptcy (one year for insiders) that allows that creditor to receive more than they would in a Chapter 7 liquidation.
The concept of 'piercing the corporate veil' in credit law allows a creditor to:
Answer: Hold shareholders or officers personally liable for corporate debts
Piercing the corporate veil is an equitable remedy that holds shareholders or officers personally liable when the corporate form is abused to perpetrate fraud or injustice.
Under the Bankruptcy Code, a Chapter 7 trustee has the power to avoid which type of transaction?
Answer: Fraudulent conveyances made within 2 years before filing with actual or constructive fraud
Under 11 U.S.C. § 548, a trustee may avoid fraudulent transfers made within 2 years before filing if made with actual fraudulent intent or for less than reasonably equivalent value.
A 'dragnet clause' in a security agreement is designed to:
Answer: Extend the collateral to cover all present and future debts owed by the debtor
A dragnet (or anaconda) clause in a security agreement extends the collateral's coverage to secure all current and future obligations the debtor owes the secured party.
Which federal agency is primarily responsible for enforcing the Equal Credit Opportunity Act (ECOA) for commercial lenders?
Answer: Consumer Financial Protection Bureau (CFPB)
The CFPB has primary enforcement authority over ECOA, including its application to commercial credit under Regulation B.