A company policy update raises a question about GLBA privacy requirements. Which action should the quality-control reviewer recommend?
Correct Answer
B) Limit reuse and redisclosure of consumer financial information
Why this is correct: The Gramm-Leach-Bliley Act (GLBA) governs privacy of consumer financial information. A central requirement is that financial institutions must protect nonpublic personal information (NPI) and limit its reuse and redisclosure to third parties, as outlined in privacy notices and regulations. The correct action for a quality-control reviewer is to recommend practices that limit such reuse and redisclosure, aligning with GLBA's core privacy protection principles. Why the other choices are wrong: "Use an internal exception instead of the required federal disclosure or timing rule" is wrong because GLBA privacy rules are federal requirements that cannot be overridden by internal policy shortcuts. "Wait until a regulator asks for the file before applying the federal requirement" is wrong because GLBA compliance (like providing privacy notices) is mandatory and proactive, not something delayed until a regulator inquires. "Resolve the GLBA Privacy Requirements issue with the ability-to-repay exception that does not fit the facts" is wrong because the ability-to-repay rule (under TILA/Regulation Z) is unrelated to privacy requirements; using an irrelevant exception is non-compliant. Exam tip: GLBA's Privacy Rule focuses on protecting NPI. Key actions involve providing notices and limiting sharing. Don't confuse it with unrelated lending rules.
Why This Is the Correct Answer
The correct response is "Limit reuse and redisclosure of consumer financial information" because Nonpublic personal information must be handled under GLBA privacy limits and notices.
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 C: 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 D: Resolve the GLBA Privacy Requirements issue with the ability-to-repay 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.
Memory Technique
GLBA privacy requirements: 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 GLBA privacy requirements; 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
Before the team acts on a production meeting, a training manager must address SCRA Interest Rate Cap. Which response is most defensible?
A team member asks about RESPA Kickbacks and Referrals in an investor-delivery review while trying to confirm the rule-based response. Which response should the loan team use?
During a disclosure desk review, the loan team encounters an RESPA Servicing Transfer issue. Which response should avoid a shortcut that would misapply the rule?
A disciplinary-risk review raises a question about TILA APR and finance-charge rules. Which action should the renewal specialist recommend?
An MLO is reviewing procedures for a case where a compliance analyst asks why covered mortgage application data is collected. What is the proper handling?
A consumer complaint response raises a question about GLBA privacy requirements. Which action should the state compliance officer recommend?
Before the team acts on a branch training session, a policy analyst must address RESPA Servicing Transfer Notice. Which response is most defensible?
A training manager is resolving RESPA Referral Fees during an internal audit sample. Which action best fits the rule?
An operations lead is resolving ECOA Prohibited Discrimination Bases during a loan-team coaching session. Which action best fits the rule?
In a file escalation meeting, a disclosure specialist sees facts tied to TILA Closing Disclosure. What should the file reflect?
People Also Study
General Mortgage Knowledge
20% of exam
Mortgage Loan Origination Activities
27% of exam
Ethics, Fraud & Consumer Protection
18% of exam
Uniform State Test Content
11% of exam
Related Study Resources
Previous Question
A branch onboarding review raises a question about RESPA and Regulation X. Which action should the licensing coordinator recommend?
Next Question
A servicer’s policy is to acknowledge information requests only once the underlying answer has been researched, which usually takes two to three weeks. What does Regulation X require in the meantime?