Check Your Understanding-Answers
- What is the basic purpose of Truth in Lending - Regulation Z?
Give buyers information about the true cost of obtaining credit, so that borrowers can compare the costs of various lenders.
- What is the right to rescind and what is not covered by this rule?
The borrower has a right to cancel the transaction by notifying the lender within three days. This does not apply to residential first mortgage loans.
- What are the penalties for violating Regulation Z?
Twice the amount of the finance charge or a minimum of $100, up to a maximum of $1,000.
Also court costs, attorney fees and actual damages.
Willful violation of regulation Z is a misdemeanor that is punishable by a fine of up to $5,000 or one year in prison, or both.
- What does ECOA prohibit?
Discrimination against applicants on the basis of race, color, religion, national origin, sex, marital status, age or dependency on public assistance
