FiCEP Practice
FiCEP Financial Counseling Quiz
Test your financial counseling knowledge with our engaging FiCEP Practice Quiz! Whether you're a seasoned counselor or just starting, this quiz is designed to challenge your understanding of various financial concepts and practices.
You'll explore topics such as:
- Budgeting strategies
- Debt management
- Effective counseling techniques
- Member communication styles
Which cycle describes members who are just surviving and living paycheck to paycheck?
Earn / spend / earn / spend
Earn / spend / borrow / spend
Earn / spend / save
Earn / borrow / spend / save
Financial counselors who don’t use what they know about hemispheric thinking, may fall into the trap of:
Assuming the member will succeed if they work with the counsellor
Asking too many questions
Telling the member what they should do
Presenting information to a member in a manner that might not be the best way to communicate
Using a hard approach, rather than a soft approach, with members:
A. Reminds members they are in control
B. Communicates in an orderly, specific and straight-forward way
C. Correlates with the right side of the brain
D. Offers possibilities and suggestions
The Johari Window describes four zones. When working with a member, the Hidden Zone represents:
Information that is known to the counselor and the member
Information that is known to the counselor and not the member
Information that is known to the member and not the counselor
Information that is not known to either the member or the counselor
Which type of counseling should a counselor use when a member is preparing for a large purchase?
Preventive
Procedural
Productive
Remedial
Which of the following is NOT a counseling element?
Budget
Credit
Debt
Savings
Which of the following is NOT a vital counselor skill?
Observing nonverbal clues
Asking closed-ended questions
Helping members assess behaviors and attitudes
Expressing empathy for members
An example of pacing is when a counselor:
Wears the same type of clothing as the member.
Matches the member’s tone.
Matches the member’s energy level.
Agrees with everything the member says.
Which of the following is NOT a step in the change process?
Recognize the need for change
Gather information and introduce new ideas
Do not revise the plan
Make changes part of habits
Which of the following decision-making tools is best to use when considering all forces in favor of or against a plan so a decision can be made?
Essential obligations
Cost-benefit analysis
Reframing
Force-field analysis
Which of the following is the first step of the counseling process?
Analyze data
Develop a spending plan
Collect member data
Establish goals and objectives
It is best to divide a budget into which cycle?
Daily
Monthly
Quarterly
Annually
Which of following provides a credit history including debt repayment practices for an individual?
Cash Flow
Net Worth
Debt Ratio
Credit Report
When discussing a member’s budget analysis, build in assumptions and adjustments to make sure the process allows for a…
12-month cycle
24-month cycle
36-month cycle
48-month cycle
Which of the following is NOT a step that will reduce debt?
Set goals
Stop creating debt
Borrow money from payday lenders
Consolidate credit cards
Increasing a monthly payment beyond the minimum required by the credit issuer is known as:
Paying more on the principal
Rolling up the payment
Paying the high-interest debts first
Paying the largest debt first
One disadvantage of leasing a car is:
Equity builds every month.
Inconsistent monthly payments.
Locked into a contract.
No factory warranty.
When determining if a vehicle is affordable, which of the following is NOT important to consider?
Purchase price
Maintenance
Insurance
Ability to pay online
Which type of savings helps one cope when the unthinkable occurs?
Set-aside
Retirement
Emergency
Holiday
A good action plan includes:
The counselor completing a budget and giving it to the member.
A list of steps and timeline for the member to complete.
A list of family members to contact.
The counselor making creditor calls.
Which of the following is not an example of ways members may start saving?
After a loan is paid off, deposit the old loan payment amount to savings
Increase living standard expenses with each new raise
Depositing bonuses or tax refunds to savings
Have a portion of each paycheck directly deposited to a savings account
Safety-net savings” is designed to help members:
Through a period of reduced or lost income.
Pay for occasional or periodic expenses.
Reach a long-term goal.
Sustain income during retirement.
One way to overcome a member’s objection to financial counseling is to:
Simply dismiss any negative comments a member makes.
Speak in a loud tone to reinforce authority as a counselor.
Refer member to another financial counselor.
Express confidence in member’s ability to address problem.
You can help couples and families who have difficulties talking through money issues by doing all of the following except:
Have each person write down individual goals & then share with each other.
Discuss individual goals & how members may work together to accomplish them.Discuss individual goals & how members may work together to accomplish them.
Meet with members separately for financial counseling.
Agree on a scheduled time to check goal progress and make modifications.
Which of the following statements is false regarding the ten steps that can help families change habits?
Children can be absent from discussions because spending changes will not affect them.
Parents must present a united front when talking with children about money.
Recognizing progress with positive feedback can keep everyone focused on the goals.
Once problem areas are identified, develop strategies to save money.
When dealing with credit during a divorce, which of the following is false?
A divorce decree may specify which party is responsible for repaying which debts.
If one spouse falls behind on payments of a jointly held account, both parties are responsible.
Marital status is not a factor in credit scoring systems.
Late payments on jointly held debts will not be reflected on both credit reports.
Seasonal employees must:
Not be concerned with ebbs and flows in monthly income.
Plan for times when income is low.
Avoid overuse of outside resources like food share programs.
Only worry about current income and not dwell on future shortfalls.
When you own your own business, accounts payable is the:
Amount of money others owe you.
Money that you anticipate the government will reimburse you.
Amount of money you owe others.
Difference between your assets and liabilities.
Which of the following statements is false?
Using credit only builds a positive credit history if the lender submits information to a CRA.
Lenders regularly report on-time and delinquent payments.
Becoming an authorized user means the user is required to acquire debt.
Unpaid overdrafts may be reported to CRAs.
Your credit report will not include:
Identification and employment information.
Income and asset information.
Payment history.
Public record information.
Identification and employment information includes all except:
Name
Date of birth
Spouse's name
Race/ethnicity information
Which of the following statements about credit score analysis is false?
Payment history has the least influence on one’s credit score.
To improve one’s capacity, a member needs to pay off debt rather than transferring it.
The largest single influence on a credit score is an individual’s payment history.
It can be counterproductive to close older, well-established credit lines.
Which of the following statements about actions that lower credit scores is false?
The 3 ways late payments can hurt credit scores are frequency, recent, & severity.
Maxed-out credit cards may reduce credit scores by as much as 100 points.
Closed accounts in good standing are usually removed from the credit report within 10 years.
Inquiries do not impact credits scores.
Individuals with high credit scores have:
History of closing loans soon after opening them.
Low percentage of available revolving credit.
Many credit cards or loans with balances.
High percentage of available revolving credit.
Which of the following statements is false?
A judgment is a court ruling that settles a lawsuit by defining the obligations of the parties involved.
A lien is a written claim against a specific item owned by a debtor.
There is a federal law that says wages cannot be garnished for child support payments.
A garnishment requires an employer to withhold a specific amount from an employee’s wages to repay debt.
When dealing with creditors/collectors, it’s important for members to:
Be proactive.
Avoid them altogether.
Be honest & tell the collector they have no intention of paying.
Extend the time to pay the collection for as long as possible.
Which of the following statements is false?
Once a collection is paid, the negative history is immediately removed from one’s credit report.
Collection agencies are open to negotiation.
In some situations, it may be beneficial to settle a debt in collections.
Members should never agree to an unaffordable payment plan.
The amount a cardholder is required to pay each month is the:
Late fee
Annual fee
Grace period
Minimum Payment
Which of the following is an advantage of using a credit card?
There is not a fee for late payments.
One’s credit score is not impacted by late payments.
Peace of mind knowing funds are available.
Identify theft is impossible when using a credit card.
Which of the following statements is false regarding tips to avoid credit card problems?
Avoid using credit cards to finance an unaffordable lifestyle
Accept unsolicited increases to credit limit to help maximize borrowing power
Pay more than the minimum payment when possible
Don’t have a high balance when relying on temporary teaser rates
Which of the following statements is false?
Simply receiving a medical bill does not affect a credit score
Paying a medical bill a few days late does not affect a credit score
Medical bills affect a credit score if a collection agency is involved.
If a medical bill is ultimately paid by an insurance company, the CRAs do not have to remove the item from the credit reports
Which of the following statements is true?
Estate obligations must be paid prior to any inheritance being paid
Beneficiaries are a priority in distributions of an estate
Surviving family members are always responsible to pay the deceased’s medical bills.
Probate courts cannot decide which estate’s assets must be sold.
While counseling members, when is the best time to ask if they have medical debt?
During bankruptcy proceedings.
During an initial needs assessment.
During garnishment proceedings.
Depositing their payroll check.
When it comes to addressing medical debt, counselors need to
Contact the medical provider for the member.
Assemble documentation and complete paperwork for the member.
Complete and submit applications for public health insurance for the member.
Coach members how to handle medical debt.
A rule of thumb for education funding is known as the
Savings principles.
Savings rule.
Rule of thirds.
Rule of fourths.
Student loan refinancing means
Taking out a new loan to pay off existing loans.
One will never lose loan benefits.
A federal student loan may be forgiven or discharged.
Only federal loans can be included in a refinance.
One needs to consider the lending amount (minimum and maximum), income requirements, and cosigner release when
Considering student loan default.
Comparing refinance companies.
Comparing mandatory and general forbearance.
Considering mandatory forbearance.
Which of the following statements is false?
Borrowers should avoid defaulting on student loans
Social Security wages may be garnished if a federal student loan is in default.
Wages can not be garnished if a federal student loan is in default.
If a federal student loan is in default, it will be turned over to a collection agency
Which is false? Seniors may have student loan debt because they:
Discharged it in their bankruptcy.
Cosigned loans for children.
Cosigned loans for grandchildren.
Took out a Parent PLUS loan.
Which of following is not a way in which repossessions can occur?
Self-help (creditor retrieves vehicle & may do so without debtor’s knowledge)
Judicial (creditor obtains a court order to work with legal authorities)
Voluntary surrender
Cure default
Which of the following is not a secondary product that can be added to a vehicle loan to help in case an emergency occurs?
GAP insurance
Full coverage automobile insurance
Credit life & disability insurance
Extended warranty
Which of the following statements is true?
Owning generally builds property equity
Owning a home is always the best investment
Renting is best if one is likely to remain in one place for many years
Owning is generally less expensive
Which of the following statement is false?
Two types of home equity borrowing are available: home equity loans & HELOCs.
A HELOC is usually structured as a revolving loan with a variable monthly payment.
Members who are refinancing debt should be encouraged to use a HELOC.
A home equity loan offers set terms that may help keep members on track.
When a member is experiencing severe financial problems, it’s important to:
Treat all debts equally.
Help the member maintain the same lifestyle.
Determine if member is judgment-proof.
Ignore collection letters until member is ready to pay.
Which of the following statements is false?
A HUD approved housing counselor will contact the mortgage company before foreclosure proceedings begin.
Financial counselors can help members figure out how much they can pay as part of a workout plan.
Find a plan that is feasible for the member and acceptable to the lender.
Lenders are more willing work with members in the late stages of foreclosure rather than early in the process.
Which of following statements is false?
Nontax governmental penalties are not discharged in ch. 7 bankruptcies.
Nontax governmental penalties may be discharged in ch. 13 bankruptcies.
Alimony is always a nondischargeable debt in ch. 7 & 13 bankruptcies, no exceptions.
Generally, alimony cannot be discharged in ch. 7 & 13 bankruptcies, however, courts may make an exception
Credit unions can _______________ to help reduce loss associated with a bankruptcy.
Offer incentives to reaffirm on a debt (ex. Allow member to retain an active credit card)
Tell members they cannot file bankruptcy
Force members to reaffirm a credit line
Contact the bankruptcy attorney to recommend a course of action without member consent
Members will not benefit from a bankruptcy if they
Develop a monthly spending plan and stick to it.
Shift their income or expenses to develop a positive cash flow.
Do not address overspending and compulsive shopping habits.
Slowly and responsibly reestablish their credit.
After a bankruptcy, members should:
Ignore cash flow analysis because they just got rid of a bunch of debt.
Monitor credit scores every few months.
Contact a credit repair company to help them clean up credit quickly.
Re-establish credit by applying for multiple credit cards with high limits.
If members wish to re-establish debt after a bankruptcy, they should not:
Consider opening a share secured credit card to re-establish revolving debt
Open a credit builder loan, as long as they can afford the payments
Pay bills on-time
Avoid all debt in the future
After members experiences identity theft, they should not
Close existing account and open new accounts
Assume fraudsters will not use their identity maliciously
Complete an identity theft affidavit
Consider putting a fraud alert or freeze on credit bureaus
With fraud alerts or freeze on your credit reports, you don’t have to
Worry about anyone stealing your identity
Verify your identity at the credit union
Be sure all of your debts are in good standing
Unfreeze your credit file before obtaining new debt
Which of the following statements is false regarding steps to repair credit after identity theft?
CRAs may block accounts at their discretion if one is an identity theft victim.
Obtain copies of credit reports from the three major CRAs & verify information is correct.
Take necessary steps to correct fraudulent transactions or accounts.
CRAs must block transactions and accounts if one is an identity theft victim.
All the following are clues a scam may be in progress except when a member:
Withdraws a large sum of cash.
Is requesting a money order or cashier’s check.
Avoiding conversation.
Provides identification.
Which of following statements is false regarding elder abuse or financial exploitation?
If something doesn’t seem right, ask probing questions.
Opening an account with $100,000 is a sign of financial exploitation.
Question a change in beneficiaries a member doesn’t remember.
Question a member complaining about a new person who is helping make decisions.
Reviewing a credit report after a member has been a victim of elder abuse will help members except:
Verifying a member is in good standing with creditors.
Ensuring no fraudulent credit accounts have been opened with the member’s name.
Monitoring deposit accounts for activity.
Finding errors that appear on the credit report.
Which of the following statements is false?
Stockbrokers charge a commission or fees for handling accounts.
Members should not expect high returns in a short period.
It’s best for members to invest early in their career.
It’s best for members to invest in stocks vs. bonds & cash.
To make the most of a 401(k) or 403(b) account, members should avoid:
Taking out a loan against their 401(k) or 403(b) account.
Taking advantage of their employer match.
Reading reports and tracking their account results over time.
Diversifying.
Which statement about a traditional IRA account is false?
Loans are allowed.
There are contribution limits.
Withdraws before 59 1/2 are subject to penalties.
Contributions are tax deductible.
Before dying, include jewelry, antiques, collectibles, and vehicles on the ________ list.
Financial Inventory
Debts
Memberships
Personal Inventory
Which of the following statements about POAs is false?
A POA means another person is to act as one’s “agent.”
The agent is empowered & obligated to be one’s fiduciary.
Springing (conditions) POA is best for selling property while one is out of the state for a while.
Durable POA gives the named person power immediately, unless stated otherwise.
Which of the following statements is false?
A will is a legal document detailing how a person would like to have assets distributed after death.
A POA’s key responsibility is to do make decisions based on own comfort, not the principal’s wishes.
A durable POA for health care is intended to ensure medical wishes are carried out according to one’s wishes.
A financial POA allows a POA to act on one’s behalf financially.
Which of the following statements is false?
It’s unnecessary to have a plan in place in the event of death or disability if you’re the sole owner of a business.
Health, life, disability, umbrella, or long-term care insurance should be reviewed and adjusted as needed throughout one’s life.
Whether a sole owner or in business with others, plans should be in place in the event of death or disability.
It’s always a good idea to meet with an estate attorney to review plans & obtain necessary documents.
What is the first immediate step someone needs to take after a death?
Send death certificates to creditors.
Contact deceased’s employer to obtain benefits.
Determine if the deceased had a prepaid funeral plan.
Pay all final expenses and debts.
After a death, financial counselors may:
Grant access the deceased’s accounts for all family members.
Help members make a list of all debts and financial obligations.
Add an authorized user to a deceased’s credit card.
Not help members at all unless the counselor is the estate’s executor.
Which of following statements is false?
Financial counselors sometimes face situations that are beyond their scope of practice.
Members may have physical, emotional, or financial needs requiring immediate call for assistance from resources outside of the credit union.
A common sign that indicates members may need assistance from professional help is severe financial difficulties that cannot be explain by other events.
Financial counselors can handle any situation a member faces because nothing is beyond their scope of practice.
Successfully referring a member to an outside agency includes all of the following except:
Going with the member to the appointment.
Recognizing a member’s need to maintain dignity.
Providing accurate information.
Helping members understand what to expect.
Members dealing with addiction, mental illness, or physical abuse have:
Immediate needs a financial counselor can handle.
Immediate needs in which a counselor needs to refer to an outside resource.
Nonimmediate needs a financial counselor can handle.
Nonimmediate needs in which a counselor needs to refer to an outside resource.
A regressive tax:
Reduces as taxpayers continue to pay taxes.
Charges everyone the same percentage of an item’s cost.
Requires taxpayers to pay more as they earn more.
Is based on a flat percentage of taxpayer income.
Which of the following is not a tax filing status?
Married, filing jointly
Married, filing separately
Single, filing jointly
Head of household
Members probably will not have to update their income tax withholding if they recently:
Separated from spouse.
Became self-employed.
Had a child.
Adopted a child.
By “pooling risk”, insurers:
Increase their exposure when losses occur.
Place all policyholders into one “pool” to increase exposure.
Refuse to insure most policy applicants.
Limit their exposure when losses occur.
Which of the following statements is false?
When evaluating risk, consider the cost of losing assets.
Assets can be tangible.
Assets can be intangible.
Insurance coverage is the best way to evaluate risk.
Which is not an insurance decision rule?
Determine insurance needs
Verify premiums are affordable
Add insurance coverage for all assets
Know the odds of suffering a loss
Which of the following statements is false?
Life insurance helps maintain a family’s financial stability if the primary wage earner dies.
Life insurance is necessary for all members.
Replacing services provided by a nonwage earner can be costly.
The only way to pass assets to heirs may be to have life insurance to cover unpaid debts.
Before referring a member to a financial planner for investing advice, be sure the member has a:
600+ credit score.
700+ credit score.
Will.
Sufficient emergency fund
The rule of 72:
Is calculated by multiplying the interest rate by 72.
Determines how many years it will take to quadruple an investment.
Calculates how many years it will take to double an investment.
Has no relevance to investing.
Which of the following statements is true?
Financial counselors are not financial planners.
Financial counselors may discuss specific investments
Goals are unimportant when it comes to one’s investing plans.
Credit union financial counselors should not discuss any aspect of investing.
Which of the following statements is false?
Members may not realize the cumulative impact addiction has on finances
Addressing addiction may help resolve financial challenges.
It is best to have an addiction specialist in your referral resource guide.
Regular, monthly deposits is a warning sign of addiction.
Which of the following is not a way to counsel partners of addicts?
Determine member’s understanding of the problem’s extent
Focus on the member’s finances rather than the addict’s
Emphasize connection between addiction and financial problems
Review member’s credit report
Which of the following statements is false?
Credit unions do not need to comply with the SCRA and MLA.
SCRA includes protections against default judgments and some court actions.
Generally, the SCRA caps interest rates at 6%, excess to be forgiven.
The MLA has a cap of 36% MAPR, which includes many types of fees.
Which of the following statements is true?
Veterans may only be members of federal credit unions.
Veterans may only be members of military-backed credit unions.
Advocates for veteran assistance cannot be found.
Advocates for veteran assistance can be found in a variety of organizations.
Which of the following is false? Make sure meeting spaces have:
Privacy.
Interrupted attention.
Uninterrupted attention.
Hospitality.
Which of the following is not a safety concern?
Schedule appointments when other activities are happening in the credit union.
Wear name tag with first name only.
Look at door to see potential danger coming through the door.
Provide a meeting space where everyone is on an even playing field.
Financial counselors can get involved in financial education by:
Being a valuable resource for community groups.
Being a state league employee.
Obtaining formal training qualifications.
Creating a financial education department.
Which of the following not an option for working with credit union organizations?
Credit union chapters
Classrooms
Insurance companies
State leagues
Which of the following is not an employee benefit of financial counseling?
Employees understand 401(k) value
Employees have less stress
Elevate credit union culture
Employees use more sick days
When creating a financial counseling and financial wellness program for credit union employees, it is important the program be:
Accredited.
Licensed
Multiple Subjects
Taught by outside trainers
It is important for an intake form to have all except the member’s:
Child's name
Debts
Savings
Credit Score
The key objective of any credit union counseling and education program should be to:
Improve members’ financial well-being even if it’s a detriment to the credit union.
Improve members’ financial well-being without being a detriment to the credit union.
Grow credit union assets.
Grow member assets.
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