Question
Which regulations do credit card companies have to follow? Check all that apply.
They have to make all credit terms clear to the borrower.
They have to accept any borrower who applies for a credit card.
They are not allowed to change annual fees or interest rates.
They have to obtain a borrower’s information in a responsible way.
They cannot discriminate based on race, gender, or national origin.
They have to avoid abusive marketing practices and protect privacy.
They have to make all credit terms clear to the borrower.
They have to accept any borrower who applies for a credit card.
They are not allowed to change annual fees or interest rates.
They have to obtain a borrower’s information in a responsible way.
They cannot discriminate based on race, gender, or national origin.
They have to avoid abusive marketing practices and protect privacy.
Answers
GPT-4o mini
Credit card companies are subject to various regulations, including the following:
1. **They have to make all credit terms clear to the borrower.** - True. Regulations such as the Truth in Lending Act (TILA) require lenders to disclose terms and costs associated with a credit card clearly.
4. **They have to obtain a borrower’s information in a responsible way.** - True. Regulations like the Fair Credit Reporting Act (FCRA) govern how lenders can collect and use personal information.
5. **They cannot discriminate based on race, gender, or national origin.** - True. The Equal Credit Opportunity Act (ECOA) prohibits discrimination in lending based on these and other protected characteristics.
6. **They have to avoid abusive marketing practices and protect privacy.** - True. The Fair Debt Collection Practices Act (FDCPA) and other regulations guide marketing practices and protect consumers' privacy rights.
The following statements are not true:
2. **They have to accept any borrower who applies for a credit card.** - False. Credit card companies can deny applications based on creditworthiness and other factors.
3. **They are not allowed to change annual fees or interest rates.** - False. While they must provide notice of changes, they can adjust fees and rates according to the terms of the cardholder agreement and applicable laws.
So, the correct options are: 1, 4, 5, and 6.
1. **They have to make all credit terms clear to the borrower.** - True. Regulations such as the Truth in Lending Act (TILA) require lenders to disclose terms and costs associated with a credit card clearly.
4. **They have to obtain a borrower’s information in a responsible way.** - True. Regulations like the Fair Credit Reporting Act (FCRA) govern how lenders can collect and use personal information.
5. **They cannot discriminate based on race, gender, or national origin.** - True. The Equal Credit Opportunity Act (ECOA) prohibits discrimination in lending based on these and other protected characteristics.
6. **They have to avoid abusive marketing practices and protect privacy.** - True. The Fair Debt Collection Practices Act (FDCPA) and other regulations guide marketing practices and protect consumers' privacy rights.
The following statements are not true:
2. **They have to accept any borrower who applies for a credit card.** - False. Credit card companies can deny applications based on creditworthiness and other factors.
3. **They are not allowed to change annual fees or interest rates.** - False. While they must provide notice of changes, they can adjust fees and rates according to the terms of the cardholder agreement and applicable laws.
So, the correct options are: 1, 4, 5, and 6.