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Ethics & Fraudmedium18% of exam

A compliance review finds that an ad shows an interest rate but omits the APR presentation. What should the MLO do next?

Correct Answer

D) State the rate as an annual percentage rate

Lines 261-265 and 273-277; 12 CFR 1026.24(c). Closed-end credit advertising rules require the finance charge rate to be stated as an annual percentage rate. Therefore, the correct response is "State the rate as an annual percentage rate".

Answer Options
A
Apply the rule only after a regulator requests the file.
B
Treat the compliance requirement as optional because closing is near.
C
Continue processing without correcting the disclosure, licensing, compensation, or consumer-protection issue.
D
State the rate as an annual percentage rate

Why This Is the Correct Answer

Lines 261-265 and 273-277; 12 CFR 1026.24(c). Closed-end credit advertising rules require the finance charge rate to be stated as an annual percentage rate. Therefore, the correct response is "State the rate as an annual percentage rate".

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