A mortgage file is paused during a policy refresh meeting because of GLBA Privacy Requirements. Which answer should apply the requirement without relying on borrower preference?
Correct Answer
C) Follow privacy notice and opt-out requirements
Why this is correct: The Gramm-Leach-Bliley Act (GLBA) requires financial institutions to protect consumers' nonpublic personal information. Compliance hinges on two main actions: providing clear privacy notices that explain information-sharing practices, and giving consumers the right to opt out of certain sharing with non-affiliated third parties. The correct answer, "Follow privacy notice and opt-out requirements," directly states these core, mandatory obligations that apply regardless of a borrower's expressed preference. Why the other choices are wrong: "Use an internal exception instead of the required federal disclosure or timing rule" is wrong because GLBA's notice and opt-out rules are federal law, not optional. "Apply the closing disclosure timing rule even though the file is testing GLBA Privacy Requirements" is wrong as it applies an irrelevant TRID rule to a privacy issue, misapplying the law. "Rely on oral agreement when the rule requires documented compliance" is wrong because GLBA's privacy notice and any opt-out election must be provided and documented in writing. Exam tip: GLBA is about privacy *notices* and opt-out *rights*. The initial notice must be given at account opening, and an annual notice must be provided thereafter.
Why This Is the Correct Answer
The correct response is "Follow privacy notice and opt-out requirements" because Nonpublic personal information must be handled under GLBA privacy limits and notices.
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 B: Apply the closing disclosure timing rule even though the file is testing GLBA Privacy Requirements.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
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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