Certified Regulatory Compliance Manager (CRCM) — Question 31

Compliance issues related to payday lending are all of the following EXCEPT:

Answer options

• A. Payday lending may adversely affect a bank's CRA rating. Any illegal or questionable practices will negatively affect a bank's CRA performance. A payday lending program may be inconsistent with helping to meet the community's credit needs
• B. The bank (or its third-party partner) must properly disclose all finance charges and fees to payday lending customers. Advertisements of the program are also subject to Truth-in-Lending requirements
• C. Adverse action disclosures must be provided to applicants of payday loans that are denied if a consumer report (including check tracking services) was used in the credit decision
• D. The bank may be subject to the FOC's unfair or deceptive practices rules.

Correct answer: D

Explanation

The correct answer is D because the other options directly address compliance requirements specific to payday lending, while D suggests a broader regulatory concern that does not specifically tie to payday lending practices. Options A, B, and C detail necessary disclosures and impacts on community ratings, which are essential aspects of compliance in this context.