CMCP LATEST 2026 EXAM QUESTIONS AND SOLUTIONS
GRADED A+
✔✔What are the factors that need to be demonstrated in the records? - ✔✔Nature and
amount of compensation, payment and receipt details.
✔✔Can lenders choose to retain records longer than three years? - ✔✔Yes, they may
want to retain records longer.
✔✔Why might lenders want to retain records longer than three years? - ✔✔To comply
with defense to foreclosure provisions.
✔✔What is an example of a defense to foreclosure provision? - ✔✔A consumer raising
a loan originator compensation rule violation.
✔✔Can a loan originator compensation rule violation be raised as a defense to
foreclosure? - ✔✔Yes, even if it occurs more than three years after payment.
✔✔What other record retention requirements must be considered? - ✔✔Applicable state
law requirements must also be considered.
✔✔Are there any exceptions to the three-year record retention requirement? - ✔✔No
exceptions mentioned in the notes.
✔✔What is HMDA? - ✔✔Home Mortgage Disclosure Act
✔✔What is the purpose of HMDA? - ✔✔To show if a financial institution serves its
community's housing needs, assist in distributing public-sector investment, and identify
discriminatory lending patterns
✔✔What is Regulation C? - ✔✔The implementing rule for HMDA
✔✔What does HMDA require financial institutions to do? - ✔✔Collect, report, and
disclose a large number of unique data points about their mortgage lending activity
✔✔What is a CMS? - ✔✔Compliance Management System
✔✔What are the components of a CMS? - ✔✔Establishing compliance responsibilities,
communicating responsibilities to employees, ensuring responsibilities are incorporated
into business processes, reviewing operations, taking corrective actions, and updating
tools and materials
,✔✔What are the components of an effective CMS? - ✔✔Board and management
oversight, compliance program (policies and procedures, training, monitoring/audit,
consumer complaint response)
✔✔What must the CMS include regarding third-party service providers? - ✔✔Oversight,
as management cannot outsource compliance responsibility
✔✔What is an HMDA CMS? - ✔✔A CMS specific to HMDA
✔✔What components should be included in an HMDA CMS? - ✔✔Oversight by board
and management, HMDA policies and procedures, HMDA training, and HMDA
monitoring/audit
✔✔What is CMS? - ✔✔Compliance Management System
✔✔What is HMDA? - ✔✔Home Mortgage Disclosure Act
✔✔What is board and management oversight? - ✔✔Supervision by top-level executives
✔✔What are corrective actions? - ✔✔Steps taken to address violations or risks
✔✔What are policies and procedures? - ✔✔Guidelines for ensuring compliance
✔✔What is training for individuals? - ✔✔Education for staff involved in HMDA
✔✔What is monitoring and/or audit? - ✔✔Evaluating compliance with HMDA
✔✔What is service provider oversight? - ✔✔Supervising compliance of external
partners
✔✔What are potential violations? - ✔✔Possible breaches of HMDA regulations
✔✔What is risk of non-compliance? - ✔✔Potential failure to meet HMDA requirements
✔✔What are corrective actions? - ✔✔Steps taken to address violations or risks
✔✔What should be included in the background section of an institution's HMDA policy?
- ✔✔Brief summary of HMDA data collection requirements and need for compliance.
✔✔What should the scope and purpose section of the policy state? - ✔✔Purpose is to
ensure compliance with HMDA and Regulation C. Scope should note final rules and
time period for covered transactions.
, ✔✔What should the roles and responsibilities section of the policy clarify? -
✔✔Expectations of stakeholders in ensuring HMDA compliance.
✔✔What should the policy describe regarding the Board of Directors? - ✔✔Their
oversight and management functions.
✔✔What responsibilities should the compliance department have according to the
policy? - ✔✔Monitoring changes, ensuring proper training, identifying business
processes, developing compliance procedures, due diligence on vendors, conducting
compliance reviews, reviewing LARs.
✔✔What is LAR? - ✔✔Loan Application Register, a record of loan applications subject
to HMDA and Regulation C.
✔✔What is the responsibility of addressing HMDA issues? - ✔✔Getting answers,
finding solutions, and ensuring timely implementation.
✔✔When should inside and outside legal counsel be consulted regarding HMDA and
Regulation C requirements? - ✔✔As appropriate.
✔✔What should be done in case of regulatory inquiries or audits addressing HMDA and
Regulation C? - ✔✔Assist with them.
✔✔What should be reported periodically to the board regarding HMDA compliance? -
✔✔Compliance with HMDA, Regulation C, P&P, and audit findings.
✔✔What is the responsibility of the independent audit department regarding HMDA
compliance? - ✔✔Auditing compliance, assessing effectiveness of HMDA CMS,
analyzing data integrity, and determining corrective action.
✔✔Can the independent audit be outsourced? - ✔✔Yes, to qualified third parties.
✔✔Who is responsible for complying with HMDA, Regulation C, and the institution's
requirements? - ✔✔Employees of the compliance department and the institution's
business lines.
✔✔What must the institution do regarding employees' HMDA compliance
responsibilities? - ✔✔Clearly describe and train employees on their responsibilities.
✔✔What must the institution determine regarding employees and HMDA compliance? -
✔✔Which employees are responsible for collecting, recording, and verifying data.
GRADED A+
✔✔What are the factors that need to be demonstrated in the records? - ✔✔Nature and
amount of compensation, payment and receipt details.
✔✔Can lenders choose to retain records longer than three years? - ✔✔Yes, they may
want to retain records longer.
✔✔Why might lenders want to retain records longer than three years? - ✔✔To comply
with defense to foreclosure provisions.
✔✔What is an example of a defense to foreclosure provision? - ✔✔A consumer raising
a loan originator compensation rule violation.
✔✔Can a loan originator compensation rule violation be raised as a defense to
foreclosure? - ✔✔Yes, even if it occurs more than three years after payment.
✔✔What other record retention requirements must be considered? - ✔✔Applicable state
law requirements must also be considered.
✔✔Are there any exceptions to the three-year record retention requirement? - ✔✔No
exceptions mentioned in the notes.
✔✔What is HMDA? - ✔✔Home Mortgage Disclosure Act
✔✔What is the purpose of HMDA? - ✔✔To show if a financial institution serves its
community's housing needs, assist in distributing public-sector investment, and identify
discriminatory lending patterns
✔✔What is Regulation C? - ✔✔The implementing rule for HMDA
✔✔What does HMDA require financial institutions to do? - ✔✔Collect, report, and
disclose a large number of unique data points about their mortgage lending activity
✔✔What is a CMS? - ✔✔Compliance Management System
✔✔What are the components of a CMS? - ✔✔Establishing compliance responsibilities,
communicating responsibilities to employees, ensuring responsibilities are incorporated
into business processes, reviewing operations, taking corrective actions, and updating
tools and materials
,✔✔What are the components of an effective CMS? - ✔✔Board and management
oversight, compliance program (policies and procedures, training, monitoring/audit,
consumer complaint response)
✔✔What must the CMS include regarding third-party service providers? - ✔✔Oversight,
as management cannot outsource compliance responsibility
✔✔What is an HMDA CMS? - ✔✔A CMS specific to HMDA
✔✔What components should be included in an HMDA CMS? - ✔✔Oversight by board
and management, HMDA policies and procedures, HMDA training, and HMDA
monitoring/audit
✔✔What is CMS? - ✔✔Compliance Management System
✔✔What is HMDA? - ✔✔Home Mortgage Disclosure Act
✔✔What is board and management oversight? - ✔✔Supervision by top-level executives
✔✔What are corrective actions? - ✔✔Steps taken to address violations or risks
✔✔What are policies and procedures? - ✔✔Guidelines for ensuring compliance
✔✔What is training for individuals? - ✔✔Education for staff involved in HMDA
✔✔What is monitoring and/or audit? - ✔✔Evaluating compliance with HMDA
✔✔What is service provider oversight? - ✔✔Supervising compliance of external
partners
✔✔What are potential violations? - ✔✔Possible breaches of HMDA regulations
✔✔What is risk of non-compliance? - ✔✔Potential failure to meet HMDA requirements
✔✔What are corrective actions? - ✔✔Steps taken to address violations or risks
✔✔What should be included in the background section of an institution's HMDA policy?
- ✔✔Brief summary of HMDA data collection requirements and need for compliance.
✔✔What should the scope and purpose section of the policy state? - ✔✔Purpose is to
ensure compliance with HMDA and Regulation C. Scope should note final rules and
time period for covered transactions.
, ✔✔What should the roles and responsibilities section of the policy clarify? -
✔✔Expectations of stakeholders in ensuring HMDA compliance.
✔✔What should the policy describe regarding the Board of Directors? - ✔✔Their
oversight and management functions.
✔✔What responsibilities should the compliance department have according to the
policy? - ✔✔Monitoring changes, ensuring proper training, identifying business
processes, developing compliance procedures, due diligence on vendors, conducting
compliance reviews, reviewing LARs.
✔✔What is LAR? - ✔✔Loan Application Register, a record of loan applications subject
to HMDA and Regulation C.
✔✔What is the responsibility of addressing HMDA issues? - ✔✔Getting answers,
finding solutions, and ensuring timely implementation.
✔✔When should inside and outside legal counsel be consulted regarding HMDA and
Regulation C requirements? - ✔✔As appropriate.
✔✔What should be done in case of regulatory inquiries or audits addressing HMDA and
Regulation C? - ✔✔Assist with them.
✔✔What should be reported periodically to the board regarding HMDA compliance? -
✔✔Compliance with HMDA, Regulation C, P&P, and audit findings.
✔✔What is the responsibility of the independent audit department regarding HMDA
compliance? - ✔✔Auditing compliance, assessing effectiveness of HMDA CMS,
analyzing data integrity, and determining corrective action.
✔✔Can the independent audit be outsourced? - ✔✔Yes, to qualified third parties.
✔✔Who is responsible for complying with HMDA, Regulation C, and the institution's
requirements? - ✔✔Employees of the compliance department and the institution's
business lines.
✔✔What must the institution do regarding employees' HMDA compliance
responsibilities? - ✔✔Clearly describe and train employees on their responsibilities.
✔✔What must the institution determine regarding employees and HMDA compliance? -
✔✔Which employees are responsible for collecting, recording, and verifying data.
