NMLS SAFE ECOA & Other Federal Laws Practice Questions
ECOA & Other Federal Laws makes up 4 of every 50 questions on a Tigertest NMLS SAFE practice test. Here are 10 of the 16 questions on it, each with the answer and the reason.
Updated by the Tigertest team. Based on the NMLS SAFE MLO content outline. Original questions; 50 per test, weighted like the real 120-question test, 75% to pass. Not affiliated with NMLS.
1. Under the Equal Credit Opportunity Act, a creditor must notify an applicant of action taken on a completed application within:
- A.90 days
- B.30 days
- C.60 days
- D.10 days
Answer: B. Regulation B requires notice of approval, counteroffer or adverse action within 30 days after a completed application. An applicant denied credit may ask for the specific reasons within 60 days of the notice.
2. Which reason for declining a mortgage application violates ECOA?
- A.The appraisal came in low
- B.The credit history shows late payments
- C.The debt-to-income ratio is too high
- D.Part of the income is alimony
Answer: D. Income from alimony, child support or public assistance must be considered if it is reliable and likely to continue. Declining because of its source is discrimination; DTI, value and credit history are lawful factors.
3. Under Regulation B, a creditor must give the applicant a copy of each appraisal developed for a first-lien loan:
- A.Promptly, or 3 days before closing
- B.Only when the loan is denied for value
- C.Only if the applicant asks in writing
- D.Within 30 days after the closing
Answer: A. Copies of all appraisals and written valuations go to the applicant promptly upon completion or three business days before consummation, whichever is earlier, unless the applicant waives the timing.
4. For an application taken in person, the applicant declines to give race and ethnicity for government monitoring. The loan originator should:
- A.Refuse to take the application
- B.Ask a manager to decide later
- C.Note it from observation or surname
- D.Leave the section blank and move on
Answer: C. Under HMDA's Regulation C, when an in-person applicant chooses not to provide the information, the lender notes ethnicity, race and sex on the basis of visual observation or surname.
5. A creditor denies a mortgage partly because of information in a credit report. Under the FCRA, the adverse action notice must include:
- A.The underwriter's loan worksheet
- B.The loan officer's NMLS number
- C.The name of the credit bureau used
- D.The full credit report
Answer: C. FCRA requires the notice to name the consumer reporting agency and say it did not make the decision, give the right to a free copy within 60 days and the right to dispute, and disclose the credit score used.
6. Under the FACTA Red Flags Rule, a mortgage lender must have:
- A.A written identity theft program
- B.A policy to report all cash deposits
- C.A privacy notice mailed each month
- D.A list of applicants' credit scores
Answer: A. The Red Flags Rule requires financial institutions and creditors with covered accounts to run a written program that spots, detects and responds to warning signs of identity theft.
7. Since the Homebuyers Privacy Protection Act took effect in March 2026, a credit bureau may sell a mortgage trigger lead to a lender only if:
- A.The consumer has a score under 620
- B.The lender pays a higher fee for it
- C.The lead is sent within 24 hours
- D.The consumer agrees or is a customer
Answer: D. The Act amended the FCRA so that trigger leads from a mortgage credit inquiry can go only to a lender the consumer has authorized, or to one making a firm offer of credit that already has a relationship with the consumer (it originated or services the current mortgage, or holds an account with the consumer).
8. A mortgage lender plans to share borrowers' names and loan balances with an unrelated home warranty company for its marketing. Under the Gramm-Leach-Bliley Act, borrowers must first get:
- A.A new Loan Estimate
- B.Notice and a chance to opt out
- C.A refund of the application fee
- D.A free copy of their credit report
Answer: B. GLBA's privacy rule requires a privacy notice and gives consumers the right to opt out of sharing with nonaffiliated third parties, with exceptions such as service providers and legal or regulatory requests.
9. A borrower pays $12,000 in currency toward closing costs in one visit to a nonbank lender. Under the Bank Secrecy Act, the lender must file:
- A.A HMDA register entry only
- B.A report of the cash payment
- C.A suspicious activity report only
- D.Nothing, unless it seems suspicious
Answer: B. Cash received in one transaction or related transactions over $10,000 must be reported to the government. A SAR is separate and filed only when activity is suspicious.
10. A loan originator files a suspicious activity report on a borrower. The originator may:
- A.Tell the borrower once the loan closes
- B.Share the report with the seller
- C.Tell the borrower to explain the deposit
- D.Not tell the borrower about the report
Answer: D. BSA rules bar disclosing a SAR, or the fact that one was filed, to the subject or anyone involved in the transaction. Tipping off the borrower is itself a violation.
Practice all 16 ecoa & other federal laws questions, and the rest of the 200-question bank, in the free NMLS SAFE training sets. Questions you miss come back until you have mastered them.
Start practicingFree to start. No account needed.