A processor handoff raises an ECOA Individual Creditworthiness question for the supervisor. What answer should guide the file?
Correct Answer
D) Provide appraisal and valuation copies on time
Why this is correct: The Equal Credit Opportunity Act (ECOA) and its implementing Regulation B have specific requirements for providing copies of appraisals and valuations to applicants. This is a mandatory, timely disclosure requirement designed to promote transparency and allow applicants to review the data used in the credit decision. The correct action is to "Provide appraisal and valuation copies on time" as the rule dictates. Why the other choices are wrong: Using a prior consumer complaint approval is not a valid substitute for the current ECOA requirement, as each application must be evaluated on its own merits with proper disclosures. Waiting for a regulator to ask is a compliance failure, as the requirement is proactive and not contingent on an inquiry. Relying on an oral agreement is insufficient because ECOA/Regulation B requires documented compliance, such as written notices and copies. Exam tip: Remember that ECOA/Regulation B is about fair lending and specific action notices; providing valuation copies is a concrete, non-negotiable duty.
Why This Is the Correct Answer
The correct response is "Provide appraisal and valuation copies on time" because ECOA/Regulation B prohibits discrimination and requires action notices and valuation copies.
Why the Other Options Are Wrong
Option A: Use prior consumer complaint approval as a substitute for the current ECOA Individual Creditworthiness requirement.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
Option B: Wait until a regulator asks for the file before applying the federal requirement.
Wait until a regulator asks for the file before applying the federal requirement. is not correct because it does not apply the rule tested by this file scenario.
Option C: Rely on oral agreement when the rule requires documented compliance.
Rely on oral agreement when the rule requires documented compliance. is not correct because it does not apply the rule tested by this file scenario.
Memory Technique
ECOA and Regulation B: identify the rule being tested, then choose the action that documents or applies that rule before the file moves forward.
Exam Tip
Match the file facts to ECOA and Regulation B; do not choose an exception or shortcut that skips the required rule.
Common Mistakes to Avoid
- -Choosing an internal exception instead of the governing rule
- -Treating preliminary or informal facts as a substitute for required documentation
- -Answering from a familiar but unrelated mortgage topic
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