Which of the following is an example of a practice prohibited under credit card regulations?

Study for the CFPB Mortgage Compliance Test. Learn with detailed quizzes and flashcards. Understand the key concepts, regulations, and guidelines with comprehensive explanations. Get ready to ace your exam!

Charging fees without clear disclosure is indeed a practice prohibited under credit card regulations. The regulations set forth by the Consumer Financial Protection Bureau (CFPB) require that all fees associated with credit cards must be clearly and conspicuously disclosed to consumers. This transparency is crucial for consumers to understand the financial implications of using their credit cards. It protects them from unexpected charges or hidden fees that could adversely affect their financial situation.

The requirement for clear disclosure underscores consumer rights and aims to foster a fair and responsible lending environment. Lenders must provide accurate information regarding any costs associated with credit usage, which includes fees for late payments, cash advances, or other transactions. Failure to do so not only misleads consumers but also violates the established guidelines set by the CFPB. Thus, any practice that involves charging fees without providing appropriate disclosure is considered non-compliant and is specifically prohibited.

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