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Ethics & Fraudmedium18% of exam

Before closing, the team discovers that an ad shows an interest rate but omits the APR presentation. What is the safest compliant answer?

Correct Answer

D) State the rate as an annual percentage rate

Lines 261-265 and 273-277; 12 CFR 1026.24(c). Closed-end credit advertising rules require the finance charge rate to be stated as an annual percentage rate. Therefore, the correct response is "State the rate as an annual percentage rate".

Answer Options
A
Wait until after the pre-closing review to decide whether the disclosure, filing, or license issue matters.
B
Treat advertising and consumer protection as satisfied by an oral manager approval.
C
Treat prior mortgage experience as a substitute for the required compliance condition.
D
State the rate as an annual percentage rate

Why This Is the Correct Answer

Lines 261-265 and 273-277; 12 CFR 1026.24(c). Closed-end credit advertising rules require the finance charge rate to be stated as an annual percentage rate. Therefore, the correct response is "State the rate as an annual percentage rate".

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