During a ECOA and Regulation B, a licensing coordinator identifies an issue involving ECOA and Regulation B. Which response is most compliant?
Correct Answer
B) Provide appraisal and valuation copies on time
Why this is correct: The Equal Credit Opportunity Act (ECOA) and Regulation B require creditors to provide applicants with copies of all appraisals and valuations developed in connection with an application. This must be done promptly, generally within three business days after the appraisal is completed or at least three business days before closing, whichever is earlier. Therefore, the most compliant response is to "Provide appraisal and valuation copies on time." Why the other choices are wrong: "Use an internal exception instead of the required federal disclosure or timing rule" is wrong because ECOA's appraisal copy rule is a mandatory federal requirement with no internal exception. "Wait until a regulator asks for the file before applying the federal requirement" is wrong because the timing rule has a specific deadline that must be met for every covered application. "Rely on oral agreement when the rule requires documented compliance" is wrong because providing the copies is a written disclosure requirement. Exam tip: ECOA's appraisal rule applies to first-lien loans secured by a dwelling. The clock starts when the appraisal is completed, not when the file is reviewed.
Why This Is the Correct Answer
The correct response is "Provide appraisal and valuation copies on time" because ECOA/Regulation B prohibits discrimination and requires action notices and valuation copies.
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: 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
ECOA and Regulation B: 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 ECOA and Regulation B; 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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