Before the loan advances, a licensing coordinator must resolve a HMDA reporting issue in a state-law refresher. What should happen?

Correct Answer

A) Treat covered dwelling-secured activity as HMDA data

Why this is correct: The Home Mortgage Disclosure Act (HMDA), implemented by Regulation C, requires covered financial institutions to collect, record, and report specific data for covered dwelling-secured loan applications and originations. The core requirement is to identify and treat qualifying activity as HMDA data. The correct action, "Treat covered dwelling-secured activity as HMDA data," directly aligns with this fundamental obligation. The licensing coordinator must ensure the issue is resolved by properly categorizing the loan activity for HMDA reporting before the loan advances. Why the other choices are wrong: "Use an internal exception instead of the required federal disclosure or timing rule" is wrong because internal policies cannot override binding federal HMDA requirements. "Wait until a regulator asks for the file before applying the federal requirement" is wrong because HMDA compliance is mandatory and proactive, not something triggered by a regulatory inquiry. "Rely on oral agreement when the rule requires documented compliance" is wrong because HMDA data collection and reporting require documented, verifiable records, not oral agreements. Exam tip: For HMDA questions, remember the core action: identify covered loans and collect the required data. Any option suggesting delay, oral agreements, or internal overrides is incorrect.