AZ NMLS Test Questions and Answers Already Passed

NMLS Laws and Regulations Latest Updated 2022 Rated A CFPB Consumer Financial Protection Bureau What does the CFPB do? Regulates RESPA, TILA, ECOA, and HMDA FTC Federal Trade Commission What does the FTC do? Monitors Red Flag Rules RESPA Real Estate Settlement Procedures Act What does RESPA do? •Protects homeowners of Single, 1-4 family dwellings, condos, & homes manufactured on lot. •Educates borrowers costs of loan • Eliminates kickbacks and referral fees (section 8) • Establishes rules for escrow What Regulation is RESPA? Reg X (X-ray of my RESPAtory system) Who oversees RESPA? (CFPB) Consumer Financial Protection Bureau How long must records be kept under RESPA? 5 years (RESPA has 5 letters= 5 letters of record keeping) What are the penalties for violating RESPA? $10k, 1 yr in prison OR both (5 years x 2= $10,000 fine) TILA Truth in Lending Act What does TILA do? • part of the Federal Consumer Protection Act and lays out disclosure requirements, advertising requirements as well as rights of rescission and penalties for violation. • Requires creditors to disclose certain key terms and costs of the transaction What Regulation is TILA? Reg Z (Today I learned about Zebras. They cost 5k for the first 3 years of life) Who oversees TILA? •Consumer Financial Protection Bureau (CFPB), •Advertising: Federal Trade Commission (FTC) How long must records be kept under TILA? 3 Years (Today I learned about Zebras. They cost 5k for the first 3 years of life) What are the penalties for violating TILA? $5k, 1 year Prison or both $500k for class action suits or 1% if net worth of servicer, whichever is less (Today I learned about Zebras. They cost $5k for the first 3 years of life) ECOA Equal Credit Opportunity Act What does ECOA do? • Keeps lenders form discriminating for age, race, religion, sex, marital status, color, national origin, income from government, or exercising rights under CCPA • Promotes the availability of credit to all applicants • Requires notice of adverse action within 30 days • Handicap is NOT protected by this law (See Fair Housing Lending Laws) What regulation is ECOA? Reg B (Be Equal) Who oversees ECOA? Consumer Financial Protection Bureau (CFPB) How long must records be kept under the ECOA? 25 Months (25 letters in "Equal Credit Opportunity Act) What are the penalties for violating ECOA? $10k individual fine $500,000 Class Action Lawsuit HMDA Home Mortgage Disclosure Act What does HMDA do? • Provides Data to public, assists public officials, and identifies evidence of descrimination • Stops Redlining (Government monitoring section 10 of 1003 What regulation is HMDA? Reg C ("C" you at home) Who oversees HMDA? Consumer Financial Protection Bureau (CFPB) Created by Federal Reserve Board (FRB) How long must records be kept under HMDA? 3 years Reported on LAR report and turned in every March 1st (LAR has 3 letters= 3 years) FCRA Fair Credit Reporting Act What regulation is FCRA? Reg V ( "V"ery Fair Credit) What does the FCRA do? • Mainly responsible for monitoring who has access to credit info • Creditors must have permissible purpose FACTA or FACT ACT Fair and Accurate Credit Transaction Act FACTA is an amendment to what Law? Fair Credit Reporting Act (FCRA) What does FACTA do? • Requires businesses to take appropriate measures to safeguard from theft in the disposal of consumer reports • Curb identity theft and improve customer dispute resolution • Requires the disclosures for credit score upfront • Requires companies to inform borrowers 30 days prior to posting negative info to credit report TCPA Telephone Consumer Protection Act Who oversees TCPA? Federal Trade Commission (FTC) What does TCPA do? • Prevents telemarketers from harassing customers • DO NOT CALL registry-Good for forever unless number is disconnected or transferred to new customer • Lenders 2 exceptions: Call 90 days after an app is taken or 18 months after a closed transaction How long must records be kept under TCPA? 2 years (only "2" exceptions for lenders) What are the penalties for violating TCPA? $16k ("16" calls is harassment) CIP Customer Identification Program OFAC Office of Foreign Assets Control (OFAC! my client is a terrorist) SAR Suspicious Activity Report What does the USA Patriot Act do? • Prevents terrorist funding • Enforces CIP • Terrorist checking done through OFAC • SAR can be submitted to FinCEN" Who oversees the USA Patriot Act? Financial Crimes Enforcement Network (FinCEN- Part of treasury) GLB Gramm Leach Bliley Act What does GLB do? • Requires companies to tell customers if they plan to share their personal info • Companies must give customers an "Opt Out" option • GLB Safeguard Rule: Requires all companies to design, implement, and maintain safeguards to protect customers information from theft. What are the penalties for violating GLB? $10k for individual lawsuit $100k for financial business lawsuit 5 years in prison FHA Fair Housing Act What does the FHA do? • Largest insurer of Mortgage Loans • Prohibits discrimination in residential Real Estate Transactions based on Race, Color, Religion, Sex, National Origin, Handicap/disability, and Familial status • Anyone is eligible for an FHA loan Who oversees FHA? The U.S. Department of Housing and Urban Development (HUD) Who oversees the Dodd-Frank Act? A director who is appointed by the President What does the Dodd- Frank Act do? • Promotes financial stability and prevents abusive practices •Changed pay structure for MLOs •Imposed the appraisal management company • Passed in July 2010 (Robin Hood of Laws) Dodd-Frank Act updated TILA to require _________? homeownership counseling for neg ARM loans if they are 1st time homebuyers AARMR American Associate of Residential Mortgage Regulators SRR State Regulatory Registry NMLS/R Nationwide Mortgage Licensing System/Registry Who oversees NMLS/R? • Conference of state Bank Supervisors (CSBS) Who created NMLS/R? Sate Regulatory Registry (SRR), an LLC AARMR What are key aspect of NMLS/R? •Bankers do not h