A file reviewer prepares a privacy-notice response for customer information sharing. Which GLBA action should control?
Correct Answer
B) Limit reuse and redisclosure of consumer financial information
Why this is correct: The Gramm-Leach-Bliley Act (GLBA) Privacy Rule governs the handling of consumers' nonpublic personal information (NPI). A core requirement is to limit the reuse and redisclosure of such information shared with nonaffiliated third parties, unless an exception applies. The correct answer, "Limit reuse and redisclosure of consumer financial information," directly reflects this key privacy safeguard under GLBA. Why the other choices are wrong: The choice "Use an internal exception instead of the required federal disclosure or timing rule" is wrong because internal policies cannot override federal GLBA requirements for privacy notices and opt-outs. The choice "Apply the reverse-mortgage occupancy timing rule even though the file is testing GLBA Privacy Requirements" is wrong because reverse-mortgage occupancy rules are unrelated to GLBA privacy provisions; applying them here is irrelevant. The choice "Rely on oral agreement when the rule requires documented compliance" is wrong because GLBA requires written privacy notices and often written agreements for sharing NPI; oral agreements are non-compliant. Exam tip: GLBA's privacy focus is on controlling the sharing and subsequent use of NPI. Think "limit reuse and redisclosure" as a key phrase.
Why This Is the Correct Answer
The correct response is "Limit reuse and redisclosure of consumer financial information" 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 C: Apply the reverse-mortgage occupancy 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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