NMLS Laws and Regulations 2023/2024 Exam practice test Questions and Answers updated
CIP - correct answer Customer Identification Program
OFAC - correct answer Office of Foreign Assets Control (OFAC! my client is a terrorist)
SAR - correct answer Suspicious Activity Report
What doe...
NMLS Laws and Regulations 2023/2024 Exam
practice test Questions and Answers updated
CIP - correct answer Customer Identification Program
OFAC - correct answer Office of Foreign Assets Control
(OFAC! my client is a terrorist)
SAR - correct answer Suspicious Activity Report
What does the USA Patriot Act do? - correct answer •
Prevents terrorist funding
• Enforces CIP
• Terrorist checking done through OFAC
• SAR can be submitted to FinCEN"
Who oversees the USA Patriot Act? - correct answer
Financial Crimes Enforcement Network
(FinCEN- Part of treasury)
GLB - correct answer Gramm Leach Bliley Act
What does GLB do? - correct answer • 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? - correct answer
$10k for individual lawsuit
$100k for financial business lawsuit
5 years in prison
FHA - correct answer Fair Housing Act
What does the FHA do? - correct answer • 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? - correct answer The U.S. Department
of Housing and Urban Development (HUD)
Who oversees the Dodd-Frank Act? - correct answer A
director who is appointed by the President
What does the Dodd- Frank Act do? - correct answer •
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 _________? - correct
answer homeownership counseling for neg ARM loans if they
are 1st time homebuyers
AARMR - correct answer American Associate of Residential
Mortgage Regulators
Who oversees NMLS/R? - correct answer • Conference of
state Bank Supervisors (CSBS)
Who created NMLS/R? - correct answer Sate Regulatory
Registry (SRR), an LLC AARMR
What are key aspect of NMLS/R? - correct answer •Bankers
do not have to take exam
• NMLS does not approve or deny applications for licenses, they
only process them for the states
, • State actually approves or denies applications
• NMLS does not have authority to press charges or fine, the
STATE does
Who has the authority to fine violators of NMLS/R? - correct
answer The State
HERA - correct answer Housing and Economic Recovery Act
What does HERA do? - correct answer • Intended to renew
public faith in Fannie Mae and Freddie Mac after the subprime
mortgage crisis of 2008
• Allows states to refinance subprime loans with mortgage
revenue bonds
• Created Federal Housing Finance Agency (FHFA)
SAFE Act - correct answer Secure and Fair Enforcement for
Mortgage Licensing Act of 2008
Who regulates and oversees the SAFE Act? - correct answer
Housing and Economic Recovery Act (HERA)
What does the SAFE Act do? - correct answer • Requires the
licensing of all mortgage lenders, brokers, and the MLO's that
work under them
• All MLOs must have a unique identifier# issued from the
NMLS
• Requires 20 hrs prelicensing education
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