A mortgage file is paused during a secondary-market screen because of Gramm Leach Bliley Privacy Requirements. Which answer should separate the real requirement from a near-miss shortcut?
Correct Answer
B) 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 requirement is to safeguard this information and provide privacy notices before sharing it with non-affiliated third parties. The correct action when a file is paused for a GLBA review is to ensure NPI is protected prior to any sharing. Why the other choices are wrong: "Treat the Gramm Leach Bliley Privacy Requirements review as complete because the file contains a related closing disclosure note" is wrong because a closing disclosure note does not fulfill GLBA's specific privacy notice and safeguard requirements. "Wait until a regulator asks for the file before applying the federal requirement" is wrong because GLBA compliance is mandatory and proactive, not reactive to a regulator's request. "Rely on oral agreement when the rule requires documented compliance" is wrong because GLBA requires written privacy notices and documented safeguards, not oral agreements. Exam tip: For GLBA, remember the phrase "protect and notify"—protect NPI and provide a privacy notice 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: Treat the Gramm Leach Bliley Privacy Requirements review as complete because the file contains a related closing disclosure note.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
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: 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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