A mortgage company contracts with a document preparation service that operates in a foreign country with weaker privacy laws. Under GLBA's Safeguards Rule, the mortgage company must:
Correct Answer
B) Ensure the foreign service provider meets equivalent safeguards through contractual requirements
Under GLBA's Safeguards Rule, financial institutions must ensure that service providers, regardless of location, implement appropriate safeguards to protect customer information. This is typically accomplished through contractual requirements that mandate adequate security measures, even if the provider operates under different local privacy laws.
Why This Is the Correct Answer
Under GLBA's Safeguards Rule, financial institutions must ensure that service providers, regardless of location, implement appropriate safeguards to protect customer information. This is typically accomplished through contractual requirements that mandate adequate security measures, even if the provider operates under different local privacy laws.
More Federal Laws Questions
A mortgage broker's website states 'Qualified borrowers can get loans with down payments as low as 3%.' Which statement about TILA advertising requirements is correct?
A loan's APR increases from 4.25% on the Loan Estimate to 4.35% on the Closing Disclosure due to a rate lock expiration. What action is required?
A lender originates a mortgage that meets all QM requirements. Three years later, the borrower defaults and claims the lender violated the ATR rule. What legal protection does the lender have?
For a closed-end mortgage loan, when must the creditor provide the Closing Disclosure to the borrower?
Which of the following documents must be provided to trigger the start of the 3-day rescission period?
People Also Study
General Mortgage Knowledge
23% of exam
Mortgage Loan Origination Activities
25% of exam
Ethics, Fraud & Consumer Protection
17% of exam
Uniform State Test Content
12% of exam
Previous Question
A mortgage broker charges a borrower a $500 processing fee and receives a $2,000 yield spread premium from the lender. For TILA disclosure purposes, what amount should be included in the finance charge?
Next Question
Under HMDA, a covered lender must collect data on which type of loan origination?