A credit union originated 19 closed-end mortgages in one year and 31 in the next. It meets every other institutional test under Regulation C.
Correct Answer
A) Not covered for closed-end: the 25-loan test needs both years met
The closed-end loan-volume test looks at each of the 2 preceding calendar years, and 19 in the earlier year fails it however large the later year is. Other choices: adding the years together is not the test; reaching 31 in the most recent year alone is not enough; and credit unions are covered institutions when they meet the tests. Source: 12 CFR 1003.2(g)
Why This Is the Correct Answer
The closed-end loan-volume test looks at each of the 2 preceding calendar years, and 19 in the earlier year fails it however large the later year is. Other choices: adding the years together is not the test; reaching 31 in the most recent year alone is not enough; and credit unions are covered institutions when they meet the tests. Source: 12 CFR 1003.2(g)
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