A mortgage team asks a branch supervisor about GLBA privacy requirements during a supervisory file review. Which answer should guide the file?
Correct Answer
C) Protect nonpublic personal information before sharing
Why this is correct: The Gramm-Leach-Bliley Act (GLBA) requires financial institutions to protect consumers' nonpublic personal information (NPI). The core privacy rule is to safeguard NPI and provide notices before sharing it with nonaffiliated third parties, absent an exception. The correct choice directly states this fundamental duty. Why the other choices are wrong: Using an "asset documentation standard" is irrelevant to GLBA privacy, which is triggered by collecting NPI, not asset value. Waiting for a regulator to ask is a compliance failure, as GLBA requires proactive protection. Relying on an oral agreement violates GLBA's requirement for documented compliance, such as providing opt-out notices in writing. Exam tip: For GLBA, remember the sequence: Notice, Opt-Out opportunity, then Protection of NPI before sharing.
Why This Is the Correct Answer
The correct response is "Protect nonpublic personal information before sharing" because Nonpublic personal information must be handled under GLBA privacy limits and notices.
Why the Other Options Are Wrong
Option A: Use the asset documentation standard to decide the GLBA Privacy Requirements issue before confirming the trigger facts.
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 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
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
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