The loan team compares the file facts with GLBA Privacy Safeguards during a borrower follow-up call. Which conclusion is accurate?
Correct Answer
A) Protect nonpublic personal information before sharing
Why this is correct: The Gramm-Leach-Bliley Act (GLBA) includes the Safeguards Rule, which requires financial institutions to develop a written security program to protect the confidentiality and integrity of customer nonpublic personal information (NPI). The governing concept is proactive protection. The correct answer, "Protect nonpublic personal information before sharing," reflects this duty to implement safeguards to secure NPI as part of standard operations. Why the other choices are wrong: The choice "Use an internal exception instead of the required federal disclosure or timing rule" is wrong because the Safeguards Rule is a federal requirement for security programs; internal exceptions cannot override it. The choice "Wait until a regulator asks for the file before applying the federal requirement" is wrong because the Safeguards Rule requires proactive implementation of security measures, not reactive compliance. The choice "Use prior state renewal approval as a substitute for the current GLBA Privacy Safeguards requirement" is wrong because GLBA's federal Safeguards Rule is a separate, ongoing requirement; state approvals for other matters do not substitute for it. Exam tip: The GLBA Safeguards Rule is about information security. Think "protect" as the key action, especially before any sharing occurs.
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: Use prior state renewal approval as a substitute for the current GLBA Privacy Safeguards requirement.
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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