What transactions are institutions chartered by Congress allowed to engage in regarding consumer transactions?

Institutions chartered by Congress are permitted to engage in securitizations and secondary market sales primarily because these actions are essential to the functioning of financial markets and the broader economy. Securitization enables these institutions to pool various types of debt—like mortgages, auto loans, or credit card debt—and convert them into securities that can then be sold to investors. This process not only provides liquidity to the institutions but also allows for the distribution of risk among a larger pool of investors.

Moreover, secondary market sales involve the buying and selling of existing financial instruments, which contributes to market efficiency and provides greater accessibility for consumers seeking credit. These transactions help institutions manage their balance sheets effectively, ensuring they maintain adequate capital levels while continuing to serve their clients.

In contrast, the other options typically present restrictions or guidelines that institutions must adhere to. For instance, transferring nonpublic personal information to third parties may violate consumer privacy laws unless specific conditions are met. Processing all consumer credit applications might not apply universally, as institutions often prioritize which applications to process based on various risk factors. Offering unlimited access to personal consumer data raises significant privacy concerns and is not permissible under many regulatory frameworks designed to protect consumer information.