Other Federal Laws Flashcards
HMDA stands for _________________________ and is implemented by who?
Home Mortgage Disclosure Act, Federal Reserve Board’s Regulation C
Where is the HMDA information found on the 1003 Loan Application?
Section 8 (Demographic Information)
What does the the HDMA determine?
They determine if financial institutions are serving the housing needs of their communities
HDMA laws were written in response to the public concerns that lenders were doing what violation under the Fair Housing Act?
Redlining
HDMA requires lending institutions to report what?
Public Loan Data, more specifically to file annual reports regarding ethnicity, race, and sex of all applicants. They are due every year in March
What is a Loan Application Register (or LAR)
The log of applications that a creditor must keep and provide to the federal government.
How long must the LARs be maintained?
three years
Does the HMDA set lending quotas for protected classes of borrowers?
No, 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.
HMDA requires that a lending institution post a general notice about the availability of HMDA data where in their office?
in the lobby of its home office and in the lobby of each branch office located in a metropolitan area.
HMDA must be made available upon request for up to how many years?
3 years
What is the Community Reinvestment Act designed to do?
It is a regulation designed to help meet the credit needs of the communities in which it operates
What is the Federal Financial Institutions Examination Council (FFIEC)?
The Federal Financial Institutions Examination (FFIEC) Council is aformal 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”
What is the role of the FFIEC?
Role of FFIEC - Compiles information as individual disclosure statements for each institution, and in the form of aggregate reports for all covered institutions.
What is the Gramm-Leach-Bliley Act (GLBA) (Reg P)?
The Gramm-Leach-Bliley Act (GLBA) (Regulation P) includes provisions to protect consumer’s personal financial information held by financial institutions.
What is another name for the Gramm-Leach-Bliley Act?
Financial Services Modernization Act of 1999
The GLBA requires financial institutions to give their customers privacy policies that explain the financial institutions’ information-sharing practices. In turn, consumers have the right to _____________ of their information.
limit some sharing
Under the GLBA Privacy rule, what must a borrow receive at first contact, and thereafter, once a year as long as they remain a customer?
Privacy Protection Notice
Under the GLB Act Consumers have the right to ____________ of having their information shared with certain third parties.
Opt-Out
The GLB Act has SPF which stands for?
Safe Guarding Policies, Pretexting Policies, and Financial Privacy Policies
The Gramm-Leach-Bliley Act requires all financial institutions to design, implement and maintain what?
safeguards to protect customer information.
Who does the Gramm-Leach-Bliley Act applies to what institutions?
Financial institutions that give loans or financial advice. This includes mortgage brokers, lenders, tax preparers and
debt collectors.
According to the GLB Act, what is the definition of a consumer?
a consumer is an individual who obtains or has obtained a financial product or service from a financial institution for personal, family or household reasons.
What is the GLBA Financial Privacy Rule?
GLBA Financial Privacy Rule - 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.
What is NPI (Non-public personal information)?
“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.”
What is the GLBA Pretexting Rule?
protects consumers from individuals and companies that obtain their personal financial information under false, fictitious, or fraudulent pretenses (pretenders).
GLBA provides guidance to institutions regarding sharing of non-public information and requires at a minimum they disclose what information?
what information is collected about its customers and to whom they share it with.
What is the penalty for fraudulently obtaining personal information?
up to five years in prison and a fine ($10,000 per individual and $100,000 for financial institutions)
Who established the National Do Not Call (DNC) Registry?
The Federal Communication Commission (FCC) and the Federal Trade Commission (FTC)
Telemarketers and sellers are required to search the registry at least once every_______ and drop from their call lists the phone numbers of consumers who have registered.
31 days
What is the fine for violating the National DNC Registry?
now $46,517.00 per call
Both the national DNC list and the internal DNC list must be updated every ______ and records to document this must be maintained for ________.
31 days, 24 months (2 years)
The National DNC Registry does not limit calls by whom?
political organizations, charities, or telephone surveyors.
What is the time frame that a telemarketer can call?
Between 8:00am and 9:00pm in the time zone of the consumer being called
A company with which a consumer has an established business relationship may call for up to ______ after the consumer’s last purchase, last delivery, or last payment unless the consumer asks the company not to call again.
18 months
If a consumer makes an inquiry or submits an application to a company, the company can call for _____.
3 months
What is the Do Not Fax and what are the exceptions and fines?
Advertisers may not send a message to anyone’s 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.
What is the MARS Rule?
The Mortgage Assistance Relief Services applies to negotiators assisting borrows with mortgage loan modifications and helps to protect distressed homeowners from foreclosure-prevention scams. Regulation O.
What rule bans collecting fees until homeowners have an acceptable written offer from the lender or servicer?
MARS rule
What rule/regulation prohibits advising consumers to discontinue communication with lenders?
MARS Rule (Reg O)
The Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) laws require companies to file a __________________ with the IRS for cash transactions exceeding ______ in one day. The act requires financial institutions to keep detailed records of cash transactions exceeding _______ (withdrawing, depositing, or transporting).
Currency Transaction Report, $10,000, $10,000
The BSA (Bank Secrecy Act) requires MLOs to report any suspicious activity exceeding what amount?
$5,000
The BSA and AML requires loan originators report suspicious activity that might be a sign of what?
Tax evasion, money laundering, or other possible criminal activity.
What is money laundering?
Money laundering involves bringing illegally obtained funds into and out of the financial system in a manner that evades law enforcement. Laundered funds are often linked to such serious crimes as terrorism, arms smuggling and drug trafficking.
What is the acronym BSA?
Bank Secrecy Act
What is the acronym AML stand for?
Anti-Money Laundering
How many days does the government require financial institutions to file Suspicious Activity Reports (SARs) when detecting suspicious activity if the perpetrator is an identifiable person?
30 days
How many days does the government require financial institutions to file Suspicious Activity Reports (SARs) when detecting suspicious activity if the perpetrator is unidentified?
60 days
The BSA/AML act requires financial institutions to keep detailed records of each cash transaction exceeding what amount?
$10,000
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. MLOs are required to report any suspicious activity exceeding what amount?
$5,000
How long are SAR reports required to be kept?
at least 5 years
The Homeowner’s Protection Act (HPA) requires lenders to cancel the PMI when the LTV reaches what percentage of the original purchase price?
78%
Under the HPA, Borrowers can request a cancellation when it reaches what percentage? This will usually be granted if they have a good payment history.
80%
HPA Allows borrowers to accelerate the cancellation date by doing what?
making additional payments that bring the LTV to 80%.
Lenders may require evidence that the value of the property has not _______________ and that the property does not ____________________________.
declined below its original value, have a second mortgage, such as a home equity loan.
The E-Sign Act (The Electronic Signatures in Global & National Commerce Act) allows 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
The E-Sign Act ensured the ____ and _____ of contracts and documents that are entered into by electronic methods.
validity and legality
The E-Sign act, a party to a contract cannot be ______________________________ 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).
forced to use electronic signature methods
The US Patriot Act requires mortgage applicants to provide what information?
their name, address, social security number or employee identification number and a government issued photo ID.
The USA Patriot Act increased the ability of law enforcement agencies to search for what information?
Telephone, email, medical, and financial records
The USA Patriot Act was created to for what reasons?
To prohibit money laundering and the financing of terrorist activities
The USA Patriot Act requires financial institutions to verify the _____ of account holders, compare the account names to names in a ______________________________, establish an anti-money laundering policy and _______ on the policy
identity, federal database of fugitives and suspected terrorists, train employees
Mortgage Acts and Practices – Advertising (Regulation N) was issued by who?
Consumer Financial Protection Bureau (CFPB)
MAP (Reg N) was issued to do what?
Prohibit false or misleading advertising of mortgage products
What does MAP (Reg N) apply to?
MAP applies to any “commercial communication” 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.
MAP (REG N) prohibits what types of misleading claims?
In general, Regulation N prohibits misleading claims by 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 communication.
How many years must copies of commercial communication and supporting documents be kept for?
2 years
The HUD Equal Access Rule states that a lender cannot inquire about an
applicant’s __________ or _______________.
sexual orientation or gender identity.
