An annual compliance meeting raises a question about FCRA credit-reporting rules. Which action should the operations lead recommend?
Correct Answer
C) Handle the dispute under FCRA timing and procedures
Why this is correct: The Fair Credit Reporting Act (FCRA), implemented by Regulation V, establishes specific procedures and timing requirements for handling consumer disputes about information in their credit reports. A furnisher or user of a report must conduct a reasonable investigation within generally 30 days of receiving a dispute and follow mandated procedures for corrections and notifications. Why the other choices are wrong: "Use an internal exception instead of the required federal disclosure or timing rule" is wrong because FCRA's dispute resolution requirements are federal law and cannot be overridden by internal policy. "Resolve the FCRA Adverse Action Notice issue with the servicing transfer exception that does not fit the facts" is wrong because it applies an irrelevant exception (servicing transfer) to a different FCRA requirement (dispute procedures), which is non-compliant. "Rely on oral agreement when the rule requires documented compliance" is wrong because FCRA disputes and investigations require written documentation to prove compliance with the law's procedures. Exam tip: For FCRA, key concepts are 'permissible purpose,' 'accuracy,' and 'dispute procedures.' The correct action will follow the statute's specific steps and deadlines.
Why This Is the Correct Answer
The correct response is "Handle the dispute under FCRA timing and procedures" because Consumer reports require a permissible purpose and proper FCRA/Reg V handling.
Why the Other Options Are Wrong
Option A: Use an internal exception instead of the required federal disclosure or timing rule.
Use an internal exception instead of the required federal disclosure or timing rule. is not correct because it does not apply the rule tested by this file scenario.
Option B: Resolve the FCRA Adverse Action Notice issue with the servicing transfer exception that does not fit the facts.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
Option D: 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
FCRA credit-reporting rules: 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 FCRA credit-reporting rules; 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
More Federal Laws Questions
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