A consumer complaint response raises a question about GLBA privacy requirements. Which action should the state compliance officer recommend?
Correct Answer
A) 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 privacy notices. When a consumer complaint raises a GLBA question, the fundamental action is to ensure NPI is protected before any sharing occurs, aligning with the law's purpose. Why the other choices are wrong: Using an internal exception instead of the required federal disclosure or timing rule violates GLBA, which mandates specific disclosures and timing. Waiting until a regulator asks for the file before applying the federal requirement is non-compliant; GLBA obligations are proactive, not reactive. Resolving the GLBA issue with a rate-lock exception that does not fit the facts is incorrect because a rate-lock exception is unrelated to privacy requirements. Exam tip: For GLBA questions, remember the core mandate: protect NPI and provide notices. Actions that delay, ignore, or misapply the rule are wrong.
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 B: 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 rate-lock 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
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