A compliance review finds that a loan officer wants different terms because of a protected applicant characteristic. What should the MLO do next?
Correct Answer
D) Evaluate the file without prohibited-basis factors
Lines 250-254; 12 CFR 1002.4(a). Credit decisions and treatment must not turn on prohibited-basis factors. Therefore, the correct response is "Evaluate the file without prohibited-basis factors".
Why This Is the Correct Answer
The correct response is "Evaluate the file without prohibited-basis factors". Credit decisions and treatment must not turn on prohibited-basis factors.
Why the Other Options Are Wrong
Option A: Treat the compliance requirement as optional because closing is near.
Treat the compliance requirement as optional because closing is near. is not correct because the governing rule requires the compliant answer shown in the explanation.
Option B: Continue processing without correcting the disclosure, licensing, compensation, or consumer-protection issue.
Continue processing without correcting the disclosure, licensing, compensation, or consumer-protection issue. is not correct because the governing rule requires the compliant answer shown in the explanation.
Option C: Ignore the issue if the borrower orally agrees to continue.
Ignore the issue if the borrower orally agrees to continue. is not correct because the governing rule requires the compliant answer shown in the explanation.
Memory Technique
Discouragement and different treatment can be fair-lending problems before denial.
Exam Tip
Discouragement and different treatment can be fair-lending problems before denial.
Common Mistakes to Avoid
- -Fair lending applies to every aspect of the credit transaction, not just final approval.
More Ethics & Fraud Questions
The loan team is resolving Privacy and Confidentiality during a quality-control sample. Which action best fits the rule?
Before the team acts on a branch training session, the loan team must address UDAAP Unfair Deceptive Practices. Which response is most defensible?
Before the loan advances, a sponsorship reviewer must resolve an predatory-lending controls issue in an NMLS filing review. What should happen?
A disclosure specialist compares the file facts with Fraud Detection and Reporting during a new-hire scenario. Which conclusion is accurate?
Before the team acts on a production meeting, the MLO must address professional conduct standard to Borrowers. Which response is most defensible?
A processor compares the file facts with Fraud Detection and Prevention during an underwriting condition review. Which conclusion is accurate?
A risk reviewer is resolving Fair Lending Ethics during a quality-control sample. Which action best fits the rule?
During intake, a title company offers a gift card for each borrower referral. What is the best compliant response?
A compliance review finds that a title company offers a gift card for each borrower referral. What should the MLO do next?
A processor asks how to handle a file where a title company offers a gift card for each borrower referral. Which response is most accurate?
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