A broker regularly does business with five creditors but obtains and reviews loan options from only one. She presents three loans from that creditor. Has she satisfied the creditor-comparison condition of Regulation Z's anti-steering safe harbor?
Correct Answer
D) No: she must obtain and review options from at least three of her regular creditors
D. Reviewing offers from only one of five regular creditors does not satisfy this safe-harbor condition. The commentary defines the relevant significant number as at least three regular creditors when that many are available. Reviewing the market and presenting options are separate steps: three offers from one creditor cannot replace the required review. Scope and exceptions: Failure to meet a safe harbor does not alone prove prohibited steering. An originator with fewer than three regular creditors considers all of them. Source: 1026.36(e)(2)–(4), comment 36(e)(3)-1 — https://www.consumerfinance.gov/rules-policy/regulations/1026/36/
Why This Is the Correct Answer
D. Reviewing offers from only one of five regular creditors does not satisfy this safe-harbor condition. The commentary defines the relevant significant number as at least three regular creditors when that many are available. Reviewing the market and presenting options are separate steps: three offers from one creditor cannot replace the required review. Scope and exceptions: Failure to meet a safe harbor does not alone prove prohibited steering. An originator with fewer than three regular creditors considers all of them.
Why the Other Options Are Wrong
Option A: Yes: using one creditor is sufficient whenever its rates look competitive
A competitive offer does not cure insufficient creditor review.
Option B: No: all presented loans must always be from different creditors
This confuses the creditors reviewed with the loans presented. Comment 36(e)(3)-1 permits qualifying loans presented to the consumer to come from a single creditor after the required creditor review; the presented loans need not all come from different creditors.
Option C: Yes: presenting any three loans alone satisfies that condition
The safe harbor specifies both the creditor pool and qualifying option criteria.
Exam Tip
Count creditors reviewed separately from loans presented.
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