Regulatory Framework & Compliance Flashcards
7 cards from real CRU practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Regulatory Framework & Compliance flashcards as text
The Gramm-Leach-Bliley Act (GLBA) primarily requires mortgage lenders to:
Answer: Protect the privacy of nonpublic personal information of consumers
GLBA's Privacy Rule requires financial institutions to explain their information-sharing practices and safeguard consumers' nonpublic personal information.
Under the Americans with Disabilities Act (ADA) as applied to mortgage lending, a lender is required to:
Answer: Provide reasonable accommodations in the application process for disabled applicants
The ADA requires lenders to provide reasonable accommodations to ensure disabled applicants have equal access to the credit application process.
A lender's underwriting guidelines require a minimum credit score of 680 for conventional loans. A borrower with a score of 670 is denied. A fair lending analysis shows the policy disproportionately excludes Hispanic applicants. This scenario describes which legal theory?
Answer: Disparate impact
Disparate impact occurs when a facially neutral policy disproportionately affects a protected class, even without discriminatory intent.
Which of the following is a key requirement of the S.A.F.E. Mortgage Licensing Act?
Answer: All mortgage loan originators must be licensed or registered through the Nationwide Multistate Licensing System (NMLS)
The S.A.F.E. Act requires all mortgage loan originators to be either state-licensed or federally registered through the NMLS.
Under the Home Ownership and Equity Protection Act (HOEPA), which of the following loans would be classified as a high-cost mortgage?
Answer: A first-lien loan where the APR exceeds the APOR by more than 6.5 percentage points
HOEPA defines a high-cost mortgage as a first-lien loan where the APR exceeds the APOR by more than 6.5 percentage points.
Which of the following would constitute a violation of the Fair Housing Act in residential mortgage lending?
Answer: Advertising mortgage products exclusively in English-language publications that reach predominantly white audiences
Selective advertising that targets only certain racial or ethnic groups while excluding others violates the Fair Housing Act's prohibition on discriminatory marketing.
A borrower refinances their primary residence but later claims they were not given the right to rescind the transaction. Under TILA, the extended right of rescission for failure to provide proper notice expires how long after the loan's consummation?
Answer: 3 years
When a lender fails to deliver required rescission notices or material disclosures, TILA extends the borrower's right of rescission up to 3 years after consummation.