Because We Said So

From an online banking course I'm taking:

Why does a regulation issued by the U.S. Department of Housing and Urban Development (HUD) affect lenders?

A) Because borrowers are using the proceeds of a mortgage to purchase housing.
B) Because the government can pretty much do whatever it wants.
C) Because the Federal Reserve Board didn't come up with a regulation quickly enough.

The online course insists that "A" is the correct answer, but I can't help thinking that "B" just about covers it, really.