Professional Ethics and Conduct Flashcards

Under the SAFE Act, how soon must a licensed MLO update NMLS after a change in information such as legal name or a new regulatory action?

Answer: Within 30 days

Licensees must update NMLS records within 30 days of the change in information.

Which of the following is a requirement for the unique identifier in advertising?

Answer: It must be included on advertisements and solicitations by the MLO

The NMLS unique identifier must appear on advertisements, solicitations, and specified documents.

An advertisement states 'Rates as low as 2.5%!' but the rate is available only to a tiny fraction of borrowers with a large down payment, and this is not disclosed. This is:

Answer: Potentially deceptive advertising

Advertising that misrepresents availability or terms is misleading and can violate Reg Z and UDAAP rules.

What is the primary purpose of the Equal Credit Opportunity Act?

Answer: Prohibiting credit discrimination on prohibited bases such as race, sex, and marital status

ECOA bars discrimination in any aspect of a credit transaction on prohibited bases.

A suspicious cash transaction pattern suggests possible money laundering. What is the general expectation for a covered financial institution under the Bank Secrecy Act?

Answer: File a Suspicious Activity Report within the required timeframe and do not tip off the customer

Covered institutions file SARs and are prohibited from notifying the subject.

An MLO employer discovers a licensed MLO has been using a different person's credit report without a permissible purpose. Which law is most directly implicated?

Answer: Fair Credit Reporting Act

FCRA limits access to consumer reports to those with a permissible purpose.

Which statement about affiliated business arrangements under RESPA is correct?

Answer: The relationship must be disclosed and the consumer cannot be required to use the affiliate

AfBAs require written disclosure, no required use, and only a return on ownership interest as payment.