An MLO receives a subpoena requesting borrower financial information for a criminal investigation. The borrower has not provided written consent for this disclosure. What should the MLO do?
Correct Answer
B) Comply with the subpoena as it is a legal requirement that overrides privacy obligations
Under the Gramm-Leach-Bliley Act, financial institutions may disclose nonpublic personal information when required by law, including valid subpoenas, court orders, or other legal process, without customer consent.
Why This Is the Correct Answer
Under the Gramm-Leach-Bliley Act, financial institutions may disclose nonpublic personal information when required by law, including valid subpoenas, court orders, or other legal process, without customer consent.
More Ethics & Fraud Questions
A lender's mobile app prominently displays a 'pre-qualification' feature that asks for minimal information but generates loan amount estimates that are consistently 20-30% higher than what borrowers actually qualify for when they complete full applications. The app includes a disclaimer that estimates are 'subject to full underwriting.' This practice is most likely:
An MLO discovers that multiple loan applications from different borrowers contain identical handwriting in the signature sections, despite different purported signers. The applications were submitted by different real estate agents. What is the most appropriate immediate action?
A mortgage loan originator receives a lead from a real estate agent about a potential borrower. Before calling this consumer, the MLO must:
An MLO tells Asian applicants that they need larger down payments 'because that's what investors prefer for your type of loan,' while telling similarly qualified white applicants that standard down payments are acceptable. This practice represents:
A mortgage company advertises 'Guaranteed approval for all credit types!' but internally has minimum credit score requirements of 580. This advertisement is problematic because it:
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Previous Question
A mortgage company's underwriting guidelines require verification of employment for self-employed applicants but not for traditionally employed applicants. Data shows this policy disproportionately affects Latino applicants who are more likely to be self-employed. The company argues this is necessary for risk management. This situation involves:
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A mortgage loan originator places an advertisement stating 'No income verification required!' This advertisement is: