An MLO pulls a credit report for employment screening of a potential loan officer candidate. The credit report shows the candidate has poor credit. Six months later, the same candidate applies for a mortgage with the company. Can the MLO use the employment credit report information for the mortgage decision?
Correct Answer
C) No, because employment screening and credit transactions are different permissible purposes
Under FCRA Section 604, employment screening and credit transactions constitute separate permissible purposes. A consumer report obtained for employment purposes cannot be used for credit decisions without obtaining a new report under the appropriate permissible purpose authorization.
Why This Is the Correct Answer
Under FCRA Section 604, employment screening and credit transactions constitute separate permissible purposes. A consumer report obtained for employment purposes cannot be used for credit decisions without obtaining a new report under the appropriate permissible purpose authorization.
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