NMLS Ethics Practice Test Questions

Question 1

What is the duty of care in fiduciary duty?

A lender promises a good interest rate but, without reason, gives a different one. To make sound judgments of the best options for clients and protect their interests. A lender should act with the highest skill, caution, and critical awareness of risk. All of the above.

Correct Answer:

To make sound judgments of the best options for clients and protect their interests.

Explanation:

Correct answer: To make sound judgments of the best options for clients and protect their interests.

Question 2

What does TILA do in combating unethical lending practices?

A lender charges higher interest rates to applicants because of low credit scores. When the lender acts in the best interests of the client but will excuse themself in a conflict of interest. TILA prevents unethical and unfair account charges by requiring fees to be clearly disclosed and banning many junk fees. All of the above.

Correct Answer:

TILA prevents unethical and unfair account charges by requiring fees to be clearly disclosed and banning many junk fees.

Explanation:

Correct answer: TILA prevents unethical and unfair account charges by requiring fees to be clearly disclosed and banning many junk fees.

Question 3

AML requires that a SAR must be filed if suspicious money-laundering activity is found.

TRUE FALSE

Correct Answer:

TRUE

Explanation:

Correct answer: True

Question 4

What is the purpose of Fair Lending Laws and Regulations (FDIC)?

A collection of fair-lending laws and regulations for easy reference. A lender acting under the law for the good of their client—never outside it. A lender should act with the highest skill, caution, and critical awareness of risk. A lender discusses client information with competitors.

Correct Answer:

A collection of fair-lending laws and regulations for easy reference.

Explanation:

Correct answer: A collection of fair-lending laws and regulations for easy reference.

Question 5

What is an example of fair lending practices?

Unreasonably high interest rates. A lender charges higher interest rates to applicants because of low credit scores. TILA prevents unethical and unfair account charges by requiring fees to be clearly disclosed and banning many junk fees. A short-term loan with low-interest fees.

Correct Answer:

A lender charges higher interest rates to applicants because of low credit scores.

Explanation:

Correct answer: A lender charges higher interest rates to applicants because of low credit scores.

Question 1

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About this Exam

Prepare with the NMLS Ethics Practice Test Questions practice quiz. This question bank includes 39 questions covering duty, fiduciary, lending, lender, and client. Use it to review important concepts, identify knowledge gaps, and build confidence for the related exam, course, or assessment.

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NMLS Ethics Practice Test Questions

This practice set contains 39 questions from the matching question bank and focuses on duty, fiduciary, lending, lender, and client. Work through each question carefully, review the provided solutions, and revisit topics that need more study before your next attempt.

This is an independent study resource intended for practice and review; it is not an official examination or an endorsement by any organization named in the title.

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NMLS Ethics Practice Test Questions

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