OTHER FEDERAL LAWS

Question 1

270. The Home Mortgage Disclosure Act (HMDA) is implemented by the

Answer 1

Federal Reserve Board’s REGULATION C.

Question 2

271. HMDA information is found on Section -

Answer 2

Section 8 (Demographic Information) of the1003 Loan Application.

Question 3

272. HMDA determines if

Answer 3

financial institutions are serving the housing needs of their communities.

Question 4

273. HMDA laws were written in response to

Answer 4

the public concerns that lenders were “redlining”.

(Because of all the redlining that was taking place – HMDA rules and regulations were created to help “identify” possible redlining. Redlining is found under the Fair Housing Act.)

Question 5

274. HMDA requires lending institutions to

Answer 5

report public loan data. More specifically, HMDA requires lenders to file annual reports regarding the ethnicity, race, and sex of all applicants. These reports are due every year in March.

Question 6

275. The log of applications that a creditor must keep and provide to the federal government is called a

Answer 6

Loan Application Register (or LAR).

Question 7

276. HMDA reports (LARs) must be maintained for -

Answer 7

for three years.

Question 8

277. HMDA does NOT set lending quotas for protected classes of borrowers. HMDA does not expressly prohibit redlining or require that a certain number of loans be made in certain neighborhoods. Instead, lenders subject to HMDA must compile certain data, provide the data in a certain format to government agencies, and make available to the public, a disclosure statement regarding that institution’s lending activities.

Question 9

278. HMDA requires a lending institution to post a general notice about

Answer 9

the availability of HMDA data in the lobby of its home office and in the lobby of each branch office located in a metropolitan area.

Question 10

279. HMDA data must be maintained and made available upon request, for -

Answer 10

three (3) years.

Question 11

280. The Community Reinvestment Act is a regulation designed to -

Answer 11

help meet the credit needs of the communities in which it operates.

Question 12

281. The Federal Financial Institutions Examination (FFIEC) Council is a formal U.S. government interagency body composed of five banking regulators that is “empowered to prescribe uniform principles, standards, and report forms to promote uniformity in the supervision of financial institutions”

Question 13

282. Role of FFIEC -

Answer 13

Compiles information as individual disclosure statements foreach institution, and in the form of aggregate reports for all covered institutions.

Question 14

283. The Gramm-Leach-Bliley Act (GLBA) includes provisions to

Answer 14

protect consumer’s personal financial information held by financial institutions.

Question 15

284. Another name for the Gramm-Leach-Bliley Act is the -

Answer 15

Financial Services Modernization Act.

Question 16

285. The GLBA requires financial institutions to -

Answer 16

give their customers privacy policies that explain the financial institutions’ information-sharing practices. In turn, consumers have the right to limit some sharing of their information.

Question 17

286. Under the GLBA Privacy Rule –

Answer 17

a borrower receive the Privacy Policy Notice at first contact, and thereafter, once a year as long as he/she remains a customer

Question 18

287. Consumers and customers have the right to -

Answer 18

opt-out of having their information shared with certain third parties per the GLB Act.

Question 19

288. The GLBA has SPF –

Answer 19

Safeguarding Policies, Pretexting Policies and Financial Privacy Policies.

Question 20

289. The Gramm-Leach-Bliley Act requires all financial institutions to design, implement and maintain-

Answer 20

safeguards to protect customer information.

Question 21

290. The Gramm-Leach-Bliley Act applies to

Answer 21

financial institutions that give loans or financial advice.

This includes mortgage brokers, lenders, tax preparers and debt collectors.

Question 22

291. According to the GLBA a CONSUMER is

Answer 22

an individual who obtains or has obtained a financial product or service from a financial institution for personal, family or household reasons.

Question 23

292. According to the GLBA a customer is a consumer with

Answer 23

a continuing relationship with a financial institution.

Question 24

293. GLBA Financial Privacy Rule -

Answer 24

governs collection of non-public personal information (NPI), restricts when information may be disclosed to affiliates and non-affiliated third parties, prohibits disclosure of access codes and account numbers to non-affiliated third parties, requires Consumer Privacy Notice.

Question 25

294. Non-public Personal Information (NPI) is -

Answer 25

“NPI is any personally identifiable financial information that a financial institution collects about an individual in connection with providing a financial product or service, unless that information is otherwise publicly available.’’

Question 26

295. GLBA Pretexting Rule -

Answer 26

protects consumers from individuals and companies that obtain their personal financial information under false, fictitious, or fraudulent pretenses (pretenders).

Question 27

296. GLBA provides guidance to institutions regarding sharing of

Answer 27

non-public information and requires at a minimum they disclose: what information is collected about its customers and to whom they share it with.

Question 28

297. Penalty for fraudulently obtaining personal information is up to -

Answer 28

five years in prison and a fine.

Question 29

298. The Federal Communication Commission (FCC) and the Federal Trade Commission (FTC) established the

Answer 29

national Do-Not-Call (DNC)Registry.

Question 30

299. Telemarketers and sellers are required to search the registry at least -

Answer 30

once every 31 days and drop from their call lists the phone numbers of consumers who have registered.

Question 31

300. Violators of the DNC list could be fined up to

Answer 31

$43,792 per call, as each call, NOT EACH DAY , is considered a separate incident.

Question 32

301. Both the national DNC list and the internal DNC list must be

Answer 32

updated every 31days and records to document this must be maintained for 24 months.

Question 33

302. The National Do-Not-Call Registry does not limit calls by

Answer 33

does not limit calls by political organizations, charities, or telephone surveyors

Question 34

303. Telemarketing calls may only be placed between -

Answer 34

8am and 9pm

in the time zone of the consumer being called

Question 35

304. A company with which a consumer has an 𝐞𝐬𝐭𝐚𝐛𝐥𝐢𝐬𝐡𝐞𝐝 𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐫𝐞𝐥𝐚𝐭𝐢𝐨𝐧𝐬𝐡𝐢𝐩 may call for up to

Answer 35

18 months after the consumer’s last purchase, last delivery, or last payment unless the consumer asks the company not to call again.

Question 36

305. If a consumer makes an inquiry or submits an application to a company -

Answer 36

the company can call for 3 𝙢𝙤𝙣𝙩𝙝𝙨..

Question 37

306. Do Not Fax - Advertisers may not send a message to anyone’s

Answer 37

𝗳𝗮𝘅 𝗻𝘂𝗺𝗯𝗲𝗿 𝘂𝗻𝗹𝗲𝘀𝘀: 𝘁𝗵𝗲𝘆 𝗵𝗮𝘃𝗲 𝗮𝗻 𝗲𝘀𝘁𝗮𝗯𝗹𝗶𝘀𝗵𝗲𝗱 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗿𝗲𝗹𝗮𝘁𝗶𝗼𝗻𝘀𝗵𝗶𝗽, 𝗳𝗮𝘅 𝗻𝘂𝗺𝗯𝗲𝗿 𝗶𝘀 𝗽𝘂𝗯𝗹𝗶𝗰 𝗶𝗻𝗳𝗼𝗿𝗺𝗮𝘁𝗶𝗼𝗻, 𝗿𝗲𝗰𝗶𝗽𝗶𝗲𝗻𝘁 𝗴𝗿𝗮𝗻𝘁𝗲𝗱 𝗽𝗲𝗿𝗺𝗶𝘀𝘀𝗶𝗼𝗻 𝗮𝗻𝗱 𝗮𝗱𝘃𝗲𝗿𝘁𝗶𝘀𝗲𝗺𝗲𝗻𝘁 𝗵𝗮𝘀 𝗰𝗹𝗲𝗮𝗿 𝗼𝗽𝘁-𝗼𝘂𝘁 𝗶𝗻𝘀𝘁𝗿𝘂𝗰𝘁𝗶𝗼𝗻𝘀 𝗼𝗻 𝘁𝗵𝗲 𝗳𝗶𝗿𝘀𝘁 𝗽𝗮𝗴𝗲 𝗼𝗳 𝘁𝗵𝗲 𝘁𝗿𝗮𝗻𝘀𝗺𝗶𝘀𝘀𝗶𝗼𝗻 𝗳𝗼𝗿 𝗿𝗲𝗰𝗶𝗽𝗶𝗲𝗻𝘁𝘀 𝘄𝗵𝗼 𝗻𝗼 𝗹𝗼𝗻𝗴𝗲𝗿 𝘄𝗶𝘀𝗵 𝘁𝗼 𝗿𝗲𝗰𝗲𝗶𝘃𝗲 𝗳𝗮𝘅𝗲𝘀 𝗳𝗿𝗼𝗺 𝘁𝗵𝗲 𝘀𝗲𝗻𝗱𝗲𝗿. 𝗧𝗵𝗲 𝗽𝗲𝗻𝗮𝗹𝘁𝘆 𝗳𝗼𝗿 𝘃𝗶𝗼𝗹𝗮𝘁𝗶𝗼𝗻𝘀 𝗶𝘀 $𝟱𝟬𝟬 𝗽𝗲𝗿 𝘂𝗻𝗮𝘂𝘁𝗵𝗼𝗿𝗶𝘇𝗲𝗱 𝗳𝗮𝘅.

Question 38

307. The Mortgage Assistance Relief Services (MARS) Rule Regulation O - applies to

Answer 38

negotiators assisting borrowers with 𝗺𝗼𝗿𝘁𝗴𝗮𝗴𝗲 𝗹𝗼𝗮𝗻 𝗺𝗼𝗱𝗶𝗳𝗶𝗰𝗮𝘁𝗶𝗼𝗻𝘀 .

(The Mortgage Assistance Relief Services (MARS) Rule helps to protect distressed homeowners from foreclosure-prevention scams.)

Question 39

308. MARS bans collecting fees until

Answer 39

homeowners have an acceptable written offer from the lender or servicer.

Question 40

309. MARS prohibits advising consumers

Answer 40

To 𝒅𝒊𝒔𝒄𝒐𝒏𝒕𝒊𝒏𝒖𝒆 𝒄𝒐𝒎𝒎𝒖𝒏𝒊𝒄𝒂𝒕𝒊𝒐𝒏 𝒘𝒊𝒕𝒉 𝒍𝒆𝒏𝒅𝒆𝒓𝒔.

Question 41

310. The Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) laws require companies to

Answer 41

𝙛𝙞𝙡𝙚 𝙖 𝘾𝙪𝙧𝙧𝙚𝙣𝙘𝙮 𝙏𝙧𝙖𝙣𝙨𝙖𝙘𝙩𝙞𝙤𝙣 𝙍𝙚𝙥𝙤𝙧𝙩 𝙬𝙞𝙩𝙝 𝙩𝙝𝙚 𝙄𝙍𝙎 𝙛𝙤𝙧 𝙘𝙖𝙨𝙝 𝙩𝙧𝙖𝙣𝙨𝙖𝙘𝙩𝙞𝙤𝙣𝙨 𝙚𝙭𝙘𝙚𝙚𝙙𝙞𝙣𝙜 $10,000 𝙞𝙣 𝙤𝙣𝙚 𝙙𝙖𝙮.

(The act requires financial institutions to keep detailed records of cash transactions exceeding $10,000(withdrawing, depositing, or transporting).)

Question 42

311. The BSA act also requires that loan originators report suspicious activity that might be a sign of tax evasion, money laundering, or other possible criminal activity. MLOs are required to report any suspicious activity exceeding $5,000.

Question 43

312. Money laundering involves bringing illegally obtained funds into and out of the financial system in a manner that evades law enforcement

Answer 43

(Laundered funds are often linked to such serious crimes as terrorism, arms smuggling and drug trafficking)

Question 44

313. Under the BSA/AML the government requires financial intuitions to file Suspicious Activity Reports (SARs) within -

Answer 44

30 days of detecting suspicious activity if the perpetrator is an identifiable person, or within 60 days of initial Detection if the perpetrator cannot be identified.

Question 45

314. The BSA act requires financial institutions to keep detailed records of cash transactions exceeding

Answer 45

$10,000 (withdrawing, depositing, or transporting).

Question 46

315. BSA/AML The act also requires that loan originators report suspicious activity that might be a sign of tax evasion, money laundering, or other possible criminal activity,

Answer 46

MLOs are required to report any suspicious activity exceeding $5,000.

Question 47

316. Copies of the SAR reports must be kept for-

Answer 47

at least five years.

Question 48

317. The Homeowner’s Protection Act (HPA) requires lenders to cancel -

Answer 48

the PMI when the LTV reaches 78% of the original purchase price.

Question 49

318. Under the HPA, Borrowers can request a cancellation when it -

Answer 49

reaches 80%, which will usually be granted if they have a good payment history.

Question 50

319. HPA Allows borrowers to accelerate the cancellation date by making -

Answer 50

additional payments that bring the LTV to 80%.

Question 51

320. Lenders may require evidence that the value of the property has not declined below its -

Answer 51

original value and that the property does not have a second mortgage, such as a home equity loan.

Question 52

321. The E-Sign Act allows

Answer 52

electronic records and electronic signatures to be valid

whenever a regulation requires a document to be in writing as long as the consumer has consented to its use.

Question 53

322. The E-Sign Act ensured the validity and legality of -

Answer 53

contracts and documents that are entered into by electronic methods.

Question 54

323. The E-Sign act, a party to a contract cannot be forced to use -

Answer 54

electronic signature methods and may sign in ink.

( also called “wet signature”. One party can use electronic signature method, while the other party to the contract can retain the right to sign the document personally (wet signature) )

Question 55

324. The USA Patriot Act requires mortgage applicants to provide their

Answer 55

name, address, social security number or employee identification number and a government issued photo ID.

Question 56

325. The USA Patriot Act increased the ability of law enforcement agencies to

Answer 56

search telephone, email, medical and financial records.

Question 57

326. The USA Patriot Act was created to prohibit _____ ______ and the _______ _____ .

Answer 57

money laundering and the financing of terrorist activities.

Question 58

327. The USA Patriot Act requires financial institutions to verify the -

Answer 58

𝗶𝗱𝗲𝗻𝘁𝗶𝘁𝘆 𝗼𝗳 𝗮𝗰𝗰𝗼𝘂𝗻𝘁 𝗵𝗼𝗹𝗱𝗲𝗿𝘀

(And compare the account names to names in a federal database of fugitives and suspected terrorists, establish an anti-money laundering policy and train employees on the policy)

Question 59

328. Mortgage Acts and Practices (REG N) – deals with

Answer 59

Advertising of Mortgage Products

MAPS Regulation N was issued by the CFPB in order to prohibit false or misleading advertising of mortgage products.

Question 60

329. MAPS applies to any “commercial advertisement” designed to produce a sale or to create interest in mortgage products or services. It is illegal to misrepresent any loan terms or conditions in an advertisement.

Answer 60

MAP IS REGULATION N

Question 61

330. In general, Regulation N prohibits misleading claims by

Answer 61

mortgage lenders

(concerning government affiliation, interest rates, fees, cost, payments associated with the loan, and the amount of cash or credit available to the consumer in any commercial advertisement)

Question 62

331. Copies of commercial communications and supporting documents must be kept for -

Answer 62

for2 years.

Question 63

332. The HUD Equal Access Rule states that a lender cannot inquire about-

Answer 63

an applicant’s sexual orientation or gender identity