Title: QUIZ: Fast Cash and Payday Loans -- Page One Economics®
Course: Kelly's Copying and Exporting Course > Section: Fast Cash and Payday Loans -- Page One Economics®

Q: In the United States, the authority to cap the interest rate for payday loans
- is part of the Truth in Lending Act.
- has been given to the federal government.
- is given to individual states.
- was assigned to the CFPB in 2011.
A: is given to individual states.

Q: The Consumer Financial Protection Bureau was created to
- establish laws that make the definition of payday lending the same in all states.
- determine the required collateral and credit score needed for approval of a payday loan.
- give protection for active duty service members by capping interest rates.
- improve the enforcement of federal consumer financial laws while expanding consumer protective regulation.
A: improve the enforcement of federal consumer financial laws while expanding consumer protective regulation.

Q: The Truth in Lending Act
- provides borrowers with information on how to fill out an online application for a payday loan.
- requires lenders to disclose the terms of a payday loan before consumers enter into the loan agreement.
- gives payday lenders protection from excessive risk when giving consumers a payday loan.
- requires borrowers to report accurate information regarding their income when applying for a payday loan.
A: requires lenders to disclose the terms of a payday loan before consumers enter into the loan agreement.

Q: Scott is a 15-year-old student who works at a part-time job and gets paid every two weeks. His paycheck goes directly to his prepaid debit card. Due to some unexpected expenses, Scott is applying for a payday loan. After visiting the storefront payday lender, Scott was denied the loan because he
- did not have a full-time job.
- could not furnish a copy of his last tax return.
- was not old enough to qualify.
- needed to set up a checking account.
A: was not old enough to qualify.

Q: Payday loans have ___________ repayment terms and _________ APRs than traditional loans and other mainstream forms of credit such as credit cards.
- shorter; higher
- longer; lower
- similar; lower
- longer; higher
A: shorter; higher

Q: In 2017, the number of payday lenders in the United States was _______________ the number of McDonald’s locations and ____________________ the number of Starbucks locations.
- slightly less than; about the same as
- greater than; about the same as
- less than; greater than
- greater than; greater than
A: greater than; about the same as

Q: A payday loan is called a “payday” loan because it
- always comes due at the end of a month.
- always comes due two weeks after the loan is made.
- comes due on the borrower’s next payday.
- is a “payday” for the lender.
A: comes due on the borrower’s next payday.

Q: A payday loan is an ___________loan that is not permitted (or not profitable due to interest rate caps) in ______ states and Washington, DC.
- unsecured; 17
- unsecured; 33
- interest-free; all
- installment; 17
A: unsecured; 17

Q: In the United States, prepaid debit cards are used more by ____________ households than by ____________ households.
- underbanked; unbanked
- unbanked; fully banked
- fully banked; unbanked
- fully banked; underbanked
A: unbanked; fully banked

Q: If a borrower takes out a two-week payday loan in the amount of $300 and the lender charges a $45 fee, the APR will be ________________ if the full amount is paid when it is due.
- 45%
- 450%
- 39%
- 391%
A: 391%