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ADCO EXAM
EXAM REVIEW
| Term | Definition |
|---|---|
| Repossession is found in which article of the UCC | article 9 |
| Risk Tolerance | is a dealer’s ability to psychologically endure the potential of losing money, customers or penalties by taking risks. |
| 3rd Line of Defense | – Corporate and other audits that identify errors before potentially identified by regulators and external auditors CORPORATE AUDITORS, 3RD PARTY AUDITOR |
| 2nd Line of Defense | – All corporate risk and compliance functions beyond the business level COMPLIANCE OFFICER, CFO, BOARD OF DIRECTORS |
| When considering a training program, which of the following should be evaluated? | – Content – Expectations – Budget – Audience |
| OFAC (Office of Foreign Assets Control) & SDN (Specially Designated National) Applies to: | • New car sales • Used car sales • Car part sales • Car rentals • Potential new hires |
| Components that constitute practical training | – Behavior – Performance – Longevity – Efficiency |
| How do you gauge the effectiveness of a training program? | – Compare behavior before training – Measure how employees are implementing/processing the new information. – Identify where there can be an improvement – Lower turnover |
| 1st Line of Defense | –Compliance activities that occur at the business level SALES PEOPLE, PARTS PEOPLE, SERVICE |
| Substantive unconscionability | refers to extreme unfairness in a contract's terms. |
| Procedural unconscionability | means that a contract is unfair because one party didn't have a real choice or was tricked into agreeing to it. |
| Sources to identify risk | – External complaints – Internal complaints – Compliance checklist – Personal observation |
| Internal Process Audit | Audit to ensure the company adheres to its policies and procedures. |
| Regulatory Audit | Audit to provide reasonable assurance that the company’s policies, procedures, and work product comply with relevant laws and regulations. |
| Compliance Gap Analysis | An audit of the organization’s policies and procedures vis- à-vis relevant laws, regulations, and best practices. |
| Compliance Review | A review of the organization’s policies, procedures, processes, work product, customer service materials, consumer-facing documents, etc., to reasonably ensure an effective compliance program. |
| Compliance Audit | A comprehensive audit of a company’s program, including an analysis of its policies and procedures, everything included in the Compliance Review, and transactional testing to reasonably ensure adherence to its policies and relevant regulations. |
| Risk Assessment Protocol | • Detection • Correction • Prevention |
| What is the ULTIMATE objective of a Compliance Management Program? | To protect the dealership |
| Risk Appetite | is the amount and type of risk that a dealer/dealership is prepared to pursue |
| What portion of a gap analysis allows for developing strategies to help implement change? | 5) Determine and document the steps required to close each gap |
| What do the acronyms UDAP / UDAAP stand for | UNFAIR DECEPTIVE ACTS & PRACTICES or UNFAIR, DECEPTIVE, OR ABUSIVE ACTS & PRACTICES |
| Creditor must issue an Adverse Action Notice within how many days? | 30 days |
| What is the IRS Cash Reporting Rule ? | requires businesses to file Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, if they receive more than $10,000 in cash from one buyer as a result of a single transaction or two or more related transactions. |
| What is an acceleration clause? | A clause in a contract requiring the assignee to pay the remainder of the loan in full due to not paying the loan by the terms agreed upon (not making a payment) |
| What does the IRS Cash Reporting Rule consider cash? | CASHIERS CHECK MONEY ORDER TRAVELERS CHECK BANK DRAFT |
| Which federal regulations require written documentation & training | Red Flags Rule & Safe Guards Rule |
| The Red Flags Rule is a part of which regulation? | Fair Credit Reporting Act |
| Gramm-Leach-Bliley Act | Governs the treatment of consumers NPI |
| What is the purpose of Magnuson Moss Act? | Regulates warranties on consumer products, requires them to be more easily understood with specific disclosures |
| Military Lending Act | Provides certain protections to covered borrowers including an interest rate cap of 36% |
| Who determines sexual harassment violations? | State law |
| What are some compliance issues that may arise under the ADA? | A telephone not friendly to the deaf, a non-compliant website, unfit physical dealership (ramps,etc), failing to offer to read docs to the blind |
| What are some compliance issues that may arise under the CAN-SPAM Act? | Accurately determining the purpose of an email, "forward to a friend" email campaigns, required disclosures, Opt Out options & management of those Opt Out options |
| What compliance issues may arise under the Fair Credit Reporting Act? | Requiring a purpose to obtain a consumer report, limitations of use, reuse, & sharing of that report, adverse action notification requirements, risk based pricing disclosure requirements, identity theft protection program, record retention program. |
| What laws either redefine or enhance federal laws? | state laws |
| As a franchise dealer, who is our enforcement agency ? | The FTC |
| What is a Policy | A document laying out the standard to which certain rules apply |
| What is a procedure? | A document entailing how exactly to follow a specific policy |
| What is the purpose of ECOA & Reg B? | prohibit a creditor from discriminating against an applicant in every aspect of a credit transaction on a prohibited basis |
| What is the most critical policy/procedure | Code of Conduct |
| Who should sign off on policies & procedures? | Senior management or Board of Directors |
| Who should review policies & procedures | Legal team/attorney |
| Why are procedures established? | to implement policies and to provide content to train staff. |
| What is the purpose of the employee handbook? | SMALL SUMMARY THAT PROVIDES DIRECTION FOR WHATS IMPORTANT FOR THE EMPLOYEE TO KNOW |
| When are OSHA 300A posting dates? | February 1st - April 30th |
| TITLE VII | TITLE VII OF THE CIVIL RIGHTS ACT OF 1964 |
| ADEA | AGE DISCRIMINATION IN EMPLOYMENT ACT |
| ADA | AMERICANS WITH DISABILITIES ACT |
| FLSA | FAIR LABOR STANDARDS ACT |
| USERRA | UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT |
| EPA | EQUAL PAY ACT OF 1963 |
| FMLA | FAMILY MEDICAL LEAVE ACT |
| ERISA | EMPLOYEE RETIREMENT INCOME SECURITY ACT |
| NLRA | NATIONAL LABOR RELATIONS ACT |
| NLRB | NATIONAL LABOR RELATIONS BOARD |
| OSHA | OCCUPTATIONAL SAFETY AND HEALTH ACT |
| GINA | GENETIC INFORMATION NONDISCRIMINATION ACT OF 2008 |
| HIPPA | HEALTH INFORMATION PORTABILITY AND ACOUNTABILITY ACT |
| FCRA | FAIR CREDIT REPORTING ACT |
Created by:
azimmerman6
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