Certified Regulatory Compliance Manager (CRCM) — Question 129

ACME National bank uses telephone solicitations to sell its debt cancellation contracts. The banker explains to the borrower the nature of the contract, gives an oral short form disclosure, receives the customer's affirmative election orally, and sends the written long form disclosures and written affirmative election within three business days. Is the bank in compliance with the telephone solicitation rules as they apply to affirmative elections?

Answer options

• A. Yes, the bank has fulfilled all of its requirements.
• B. No, oral affirmative elections are not acceptable.
• C. No, the bank also must give the customer 30 days to cancel the contract.
• D. No, telephone solicitations are not allowed for debt cancellation contracts.

Correct answer: C

Explanation

The correct answer is C because the bank must provide the customer with a 30-day period to cancel the contract, which is a key requirement. Option A is incorrect as the bank has not met all obligations. Option B is wrong since oral confirmations can be valid under certain conditions. Option D is incorrect because telephone solicitations are allowed as long as they follow the proper regulations.