The Dodd-Frank Act of 2010

question 25

Multiple Choice

The Dodd-Frank Act of 2010:

• A) requires that lenders ensure borrowers will repay their mortgage loans.
• B) prohibits unfair and deceptive lending practices, although subprime mortgages are excluded from the scope of the Act.
• C) expands protection for borrowers of high-cost mortgage loans.
• D) requires that lenders disclose the minimum amount a consumer could pay on a variable rate mortgage.

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Definitions:

Taxable Income

The portion of an individual's or corporation's income that is subject to taxation by governmental authorities.

Book Income

Book income refers to the amount of income reported by a company in its financial statements according to accounting principles, before any adjustments for tax purposes.

Deferred Tax Liabilities

Future tax payments a company is obligated to pay the government, arising due to temporary differences between its taxable income and its accounting earnings.

Deferred Tax Assets

Future tax benefits obtained due to deductible temporary differences and carryforwards, recognized in financial accounting.