A branch manager asks about a loan file because an outside party asks for borrower bank statements without a permissible basis. What should happen?
Correct Answer
A) Follow privacy limits before sharing nonpublic personal information
Lines 273-277; 12 CFR Part 1016 summary and Subparts A-B. Borrower nonpublic personal information is subject to privacy notices and sharing limits. Therefore, the correct response is "Follow privacy limits before sharing nonpublic personal information".
Why This Is the Correct Answer
The correct response is "Follow privacy limits before sharing nonpublic personal information". Borrower nonpublic personal information is subject to privacy notices and sharing limits.
Why the Other Options Are Wrong
Option B: 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 C: 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 D: 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
Outside party plus borrower data means pause and verify authority.
Exam Tip
Outside party plus borrower data means pause and verify authority.
Common Mistakes to Avoid
- -Closing a loan does not remove privacy duties for borrower information.
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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