Open-end credit transactions; b. Purchase-money loans incurred to acquire or construct a consumer’s principal residence; or . Credit cards and open-end lines of credit are examples. The law applies to “open end credit accounts.” These include credit cards and revolving charge accounts. In this kind of credit the lender extends credit for use by the consumer, with an outside limit that depends on the debtor’s credit history and ability to handle the debt repayment. For example: i. the creditor must ask all credit applicants for a statement of marital status. The finance charge (interest) is the price you pay for being granted credit. The account is not considered past due as long as you make payments according to the terms to which you agreed. Does it appear the following are accurately disclosed: a. In this example, the transaction is an open-end line of credit under Regulation C, provided the other requirements of § 1003.2(o) are met. Extension of credit. Regardless of the purpose for which a credit card is to be used, including business, commercial, or agricultural use, no credit card shall be issued to any person except: (1) In response to an oral or written request or application for the card; or (2) As a renewal of, or substitute for, an accepted credit card. Thus, Choice A is the best one offered. In 1980, open-end credit generally consisted of credit card accounts with small credit lines that limited the exposure an institution had to an individual borrower. Dumping old files in the trash bin behind the building . (b) Limitations. Any bank or credit union that does not fund a specific transaction C. Any financial institution that does not fund a specific transaction D. Any of the above The following words and terms, when used in this chapter have the following meanings, unless the context clearly indicates otherwise: Association—A savings association subject to the Code. Generally, the MAPR for open-end credit should be calculated following the rules for calculating the effective APR for a billing cycle as set for in 12 CFR 1026.14 (c) and (d) of Regulation Z. A credit card is an example of an open-end consumer loan. For the purposes of computing delinquency, a payment of 90% or more of the contractual payment will be considered as a full payment. For an open‑end credit plan, "total loan amount" means the borrower's initial maximum credit limit. Ag exception. Equity REIT investments typically generate good dividend income, because the REIT distributes most of the net rental income to shareholders. In actuality, a credit card is simply a loan from a lending institution (the issuing company) that pays the merchant when it receives a loan document (a credit card receipt) from the merchant. If the consumer fails to settle the outstanding amount on the credit card, he/she would be charged interest until the amount is paid off. Unless you pay off the debt in full each month, you will often have to pay a high-rate of interest or other kinds of finance charges for the use of credit. B. Similarly, assume a transaction in which the person extending open-end credit is a financial institution under § 1003.2(g) but is not a creditor under Regulation Z, § 1026.2(a)(17). includes information in the furnisher's possession that the CFPB has determined would likely be materially misleading in evaluating a consumer's creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living, if absent. With an open-end loan, you're approved for a specific amount. The consumer is able to make purchases on a credit card but must pay the outstanding amount when it becomes due. 2. ARTICLE 4. While each situation must be separately considered on its own merits, payments made for travel, subsistence or to industry promotion funds … Approximately one-fifth of loans granted by consumer finance companies are for debt consolidation. Which of the following actions is not allowed? Open-End Loans. Code—The Savings Association Code of 1967 (7 P. S. §§ 6020-1—6020-254). First, the good news. §§16a-1-301[17] & 16a-3-308a) In addition, any mortgage may be subject to the UCCC by contract (see Kan. Stat. Definition is for open-end credit. Open-end credit plans (such as home equity lines of credit, or HELOCs); Time-share plans; ... You must consider the following eight underwriting standards when making an ATR determination: 10 . This type of consumer credit is found with most credit cards. ... 167) The expected rate of inflation should not be considered when determining the amount of interest a creditor should charge. (e) A participation without recourse is considered to be an extension of credit by the participating bank, not by the originating bank. The change in the nature of these What Is the Purpose of the Fair Credit Billing Act? – A high‑cost home loan shall be subject to the following limitations: (1) No call provision. Transactions other than under an open end credit plan (a) Required disclosures by creditor. Revolving Open-end Credit. Credit cards and lines-of-credit are examples of open-end accounts. 215.4 of this part, an extension of credit by a member bank is considered to have been made at the time the bank enters into a binding commitment to make the extension of credit. C. Tax deductions and tax credits D. Speculation and aggressive gains . (see Kan. U.C.C. (a) Issuance of credit cards. The borrower has to attend a funeral out of town C. The borrower has non-refundable tickets for a trip during the waiting period. The following points concern those commercial, closed-end mortgage loans or open-end lines of credit that are not covered by HMDA 6: 1. You typically use credit cards to make purchases. alimony received and child support payments are not considered sources of income. Credit cards are classified as revolving credit because you have a set credit limit, you can use as much or as little of the credit limit as you want, any balance on the account “revolves” to the next month and the account remains open when the balance is zero. open-end credit evolved. The FCBA, however, does not apply to installment loans like mortgages, auto loans, or personal loans which you repay on a fixed schedule. In today’s environment, open-end credit generally includes accounts with much larger lines of credit and higher risk levels. The best answer is A. 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