Question 1

Under HMDA, what is the threshold for reporting the interest rate spread for first lien mortgage loans?

Accepted Answer

A)  Over 3 percentage points 
B)  Over 5 percentage points 
C)  Over 7 percentage points and when the loan is subject to the Home Ownership and Equity Protection Act 
D)  Less than 8 percentage points but greater than 5 percentage points 
A)  Over 3 percentage points 
B)  Over 5 percentage points 
C)  Over 7 percentage points and when the loan is subject to the Home Ownership and Equity Protection Act 
D)  Less than 8 percentage points but greater than 5 percentage points A

Question 2

Is the renewal of a loan considered to be a new extension of credit for purposes of valuing the collateral under Regulation U?

Accepted Answer

A)  Yes 
B)  Yes, if any additional amounts are added to the loan balance 
C)  Yes, if any amounts other than interest, service charges, or taxes are added to the loan balance 
D)  No, a renewal is never considered to be a new credit 
A)  Yes 
B)  Yes, if any additional amounts are added to the loan balance 
C)  Yes, if any amounts other than interest, service charges, or taxes are added to the loan balance 
D)  No, a renewal is never considered to be a new credit C

Question 3

Of the following types of data, which one is NOT required to be reported for each application for an originated loan subject to Regulation C?

Accepted Answer

A)  Purpose of the loan 
B)  Race, ethnicity, and sex of the applicant 
C)  Type of action taken and the date 
D)  The interest rate on the loan 
A)  Purpose of the loan 
B)  Race, ethnicity, and sex of the applicant 
C)  Type of action taken and the date 
D)  The interest rate on the loan D

Question 4

Creditors must retain for 25 months after the date that an offer of credit is made (12 months for business applicants with gross revenues of $1 million or less) the following items EXCEPT:

Accepted Answer

A)  The text of any prescreened solicitation 
B)  All other written information concerning the applicant 
C)  The list of criteria used to select recipients 
D)  Any record of complaints regarding the solicitation 
A)  The text of any prescreened solicitation 
B)  All other written information concerning the applicant 
C)  The list of criteria used to select recipients 
D)  Any record of complaints regarding the solicitation

Question 5

By sending an item to a Reserve Bank, a sender:

Accepted Answer

A)  Never authorizes the Reserve Bank to handle the item based on this regulation and the Reserve Bank's circulars 
B)  Warranties for electronic items that are substitute checks 
C)  Warrants to each Reserve Bank handling the item that it has good title, that it is entitled to enforce the item, that the item has not been materially altered, and that the item bears all endorsements applied by parties that previously handled the item in paper or electronic form 
D)  The sender makes all of the warranties set forth in the Uniform Commercial Code (UC
C)  as if the item were subject to the UCC and makes all of the Regulation CC warranties as if the electronic item were a paper item subject to that regulation 
A)  Never authorizes the Reserve Bank to handle the item based on this regulation and the Reserve Bank's circulars 
B)  Warranties for electronic items that are substitute checks 
C)  Warrants to each Reserve Bank handling the item that it has good title, that it is entitled to enforce the item, that the item has not been materially altered, and that the item bears all endorsements applied by parties that previously handled the item in paper or electronic form 
D)  The sender makes all of the warranties set forth in the Uniform Commercial Code (UC
C)  as if the item were subject to the UCC and makes all of the Regulation CC warranties as if the electronic item were a paper item subject to that regulation

Question 6

Which of the following practices is authorized by the Federal Reserve Act?

Accepted Answer

A)  An agreement by a bank that it is responsible for the obligations of its subsidiary 
B)  A bank's purchase, in its fiduciary capacity, of the affiliate's assets if the fiduciary instrument allows for such a purchase 
C)  The sale of a nonaccruing loan from a bank to its bank affiliate 
D)  The acceptance of an affiliate's securities of an affiliate as collateral for a NOTES bank's loan from the bank to the affiliate 
A)  An agreement by a bank that it is responsible for the obligations of its subsidiary 
B)  A bank's purchase, in its fiduciary capacity, of the affiliate's assets if the fiduciary instrument allows for such a purchase 
C)  The sale of a nonaccruing loan from a bank to its bank affiliate 
D)  The acceptance of an affiliate's securities of an affiliate as collateral for a NOTES bank's loan from the bank to the affiliate

Question 7

Which of the following would NOT be acceptable under the Bank Bribery Act and the relevant guidelines?

Accepted Answer

A)  A luncheon paid for by a bank customer after a transaction is closed 
B)  A gift of a hunting rifle to a loan officer from a borrower at Christmas 
C)  The gift of a gold watch to a loan officer from a customer who is the loan NOTES officer's cousin 
D)  An award of a writing pen and pencil set to a bank officer by a civic organization 
A)  A luncheon paid for by a bank customer after a transaction is closed 
B)  A gift of a hunting rifle to a loan officer from a borrower at Christmas 
C)  The gift of a gold watch to a loan officer from a customer who is the loan NOTES officer's cousin 
D)  An award of a writing pen and pencil set to a bank officer by a civic organization

Question 8

Which of the following is NOT a requirement when a bank pays an employee a fee for referring a high-net-worth or institutional customer to a broker?

Accepted Answer

A)  The bank must have a written agreement with the broker 
B)  The bank must give a disclosure to the customer 
C)  The bank must reasonably believe that the customer is a high net worth or institutional customer 
D)  The employee must be registered with the bank's regulatory agency 
A)  The bank must have a written agreement with the broker 
B)  The bank must give a disclosure to the customer 
C)  The bank must reasonably believe that the customer is a high net worth or institutional customer 
D)  The employee must be registered with the bank's regulatory agency

Question 9

When may a bank pay an overdraft of $5,000 created by an executive officer of the bank?

Accepted Answer

A)  When the officer is at the level of a vice president or lower. 
B)  When the officer has previously signed an overdraft protection credit agreement in an amount sufficient to cover the overdraft. 
C)  When the officer has enough funds in another account to cover the overdraft. 
D)  When the bank pays the overdrafts for other good customers in the ordinary course of business. 
A)  When the officer is at the level of a vice president or lower. 
B)  When the officer has previously signed an overdraft protection credit agreement in an amount sufficient to cover the overdraft. 
C)  When the officer has enough funds in another account to cover the overdraft. 
D)  When the bank pays the overdrafts for other good customers in the ordinary course of business.

Question 10

ABC Co. signed a contract to export goods to Country M, a boycotting country. Payment will be made by a letter of credit confirmed by First National Bank. The letter of credit requires ABC Co. to certify that none of its directors are nationals of any country boycotted by Country M before ABC can be paid. First National Bank confirms the letter of credit to ABC after determining that all of the documents are in order. Did First National Bank participate in a boycott, and must the bank report the action to the IRS?

Accepted Answer

A)  No. The bank's action was only ministerial. 
B)  Yes. The action was participation in a boycott and the bank must report the action to the IRS. 
C)  No. Only ABC Co. is required to report to the IRS. 
D)  Yes, but no reporting requirements were triggered. 
A)  No. The bank's action was only ministerial. 
B)  Yes. The action was participation in a boycott and the bank must report the action to the IRS. 
C)  No. Only ABC Co. is required to report to the IRS. 
D)  Yes, but no reporting requirements were triggered.

Question 11

A subsidiary of First National Bank can legally participate in all but one of the following businesses. In which business may the subsidiary NOT legally participate?

Accepted Answer

A)  Selling securities 
B)  Selling insurance 
C)  Developing real estate 
D)  Providing financial planning advice 
A)  Selling securities 
B)  Selling insurance 
C)  Developing real estate 
D)  Providing financial planning advice

Question 12

Purpose credit is credit for all of the following EXCEPT:

Accepted Answer

A)  Immediate purpose of purchasing or carrying margin stock 
B)  Incidental purpose of purchasing or carrying margin stock 
C)  Ultimate purpose of purchasing or carrying margin stock 
D)  Accidental purpose of purchasing or carrying margin stock 
A)  Immediate purpose of purchasing or carrying margin stock 
B)  Incidental purpose of purchasing or carrying margin stock 
C)  Ultimate purpose of purchasing or carrying margin stock 
D)  Accidental purpose of purchasing or carrying margin stock

Question 13

While Presenting items for payment:

Accepted Answer

A)  A Reserve Bank or a subsequent collecting bank may present an item for payment but doesn't send the item for presentment and payment 
B)  A Reserve Bank may send an item to a collecting bank with authority to present it for payment or send it for presentment and payment 
C)  A Reserve Bank may present an item for payment at the place requested by the paying bank, at a place requested by the nonbank payor, through a clearinghouse, or under a special collection agreement 
D)  Within a Reserve Bank's district, the Reserve Bank may present the item indirectly to the paying bank or a nonbank payor, as applicable 
A)  A Reserve Bank or a subsequent collecting bank may present an item for payment but doesn't send the item for presentment and payment 
B)  A Reserve Bank may send an item to a collecting bank with authority to present it for payment or send it for presentment and payment 
C)  A Reserve Bank may present an item for payment at the place requested by the paying bank, at a place requested by the nonbank payor, through a clearinghouse, or under a special collection agreement 
D)  Within a Reserve Bank's district, the Reserve Bank may present the item indirectly to the paying bank or a nonbank payor, as applicable

Question 14

The institution need not provisionally credit the consumer's account if it requires but does not receive written confirmation of oral notice of error or if the error involves an account subject to the margin requirements of ______________.

Accepted Answer

A)  Regulation T 
B)  Regulation X 
C)  Regulation Z 
D)  Regulation E 
A)  Regulation T 
B)  Regulation X 
C)  Regulation Z 
D)  Regulation E

Question 15

Which of the following actions is NOT a custodial requirement of the Government Securities Act?

Accepted Answer

A)  Keeping possessory government securities in a vault with dual control access 
B)  Segregating government securities from bank assets 
C)  Keeping government securities free of liens, claims, and charges. 
D)  Issuing safekeeping receipts for securities 
A)  Keeping possessory government securities in a vault with dual control access 
B)  Segregating government securities from bank assets 
C)  Keeping government securities free of liens, claims, and charges. 
D)  Issuing safekeeping receipts for securities

Question 16

It is a corporation or a non-depository institution that maintains an account with a Reserve Bank

Accepted Answer

A)  Savings and loan associations 
B)  Clearing institution 
C)  A foreign banker 
D)  Insured credit unions 
A)  Savings and loan associations 
B)  Clearing institution 
C)  A foreign banker 
D)  Insured credit unions

Question 17

As an alternative to providing a periodic statement, a financial institution holding payroll card accounts may make available:

Accepted Answer

A)  The account balance, accessed through a readily available telephone line 
B)  An electronic history of the account that covers a period of at least 60 days preceding the time the consumer electronically accesses the account 
C)  A written history of account transactions, available on request that covers a period of at least 15 days preceding the date of the consumer request 
D)  A written history of account transactions, available on request that covers a period of at least 30 days preceding the date of the consumer request 
A)  The account balance, accessed through a readily available telephone line 
B)  An electronic history of the account that covers a period of at least 60 days preceding the time the consumer electronically accesses the account 
C)  A written history of account transactions, available on request that covers a period of at least 15 days preceding the date of the consumer request 
D)  A written history of account transactions, available on request that covers a period of at least 30 days preceding the date of the consumer request

Question 18

Which of the following credit arrangements would most likely be considered a purpose credit because it is indirectly secured by margin stock?

Accepted Answer

A)  A loan made to purchase margin stock secured by nonmargin stock 
B)  A loan made to a company for various corporate purposes, including the purchase of margin stock, secured by the corporate assets, which from time to time include margin stock; on the date of the consummation of the transaction approximately 10 percent of the assets of the company are margin stock 
C)  A loan made to purchase margin stock, guaranteed by an individual who has pledged margin stock as security for the guarantee 
D)  Bank is the trustee for a qualified pension plan from which the participants may borrow and use their interest in the plan as security; a participant borrows money for the purpose of purchasing margin stock 
A)  A loan made to purchase margin stock secured by nonmargin stock 
B)  A loan made to a company for various corporate purposes, including the purchase of margin stock, secured by the corporate assets, which from time to time include margin stock; on the date of the consummation of the transaction approximately 10 percent of the assets of the company are margin stock 
C)  A loan made to purchase margin stock, guaranteed by an individual who has pledged margin stock as security for the guarantee 
D)  Bank is the trustee for a qualified pension plan from which the participants may borrow and use their interest in the plan as security; a participant borrows money for the purpose of purchasing margin stock

Question 19

What may a creditor do in response to an application for credit from a business with gross revenues of $1 million or less?

Accepted Answer

A)  Give a disclosure of the applicant's right to receive a statement of reasons at the time of the application instead of at the time of the adverse action 
B)  Mention adverse action notices only if requested by the applicant 
C)  Omit the ECOA statement on all notices NOTES 
D)  Provide only the ECOA statement to the applicant 
A)  Give a disclosure of the applicant's right to receive a statement of reasons at the time of the application instead of at the time of the adverse action 
B)  Mention adverse action notices only if requested by the applicant 
C)  Omit the ECOA statement on all notices NOTES 
D)  Provide only the ECOA statement to the applicant

Question 20

The initial disclosure requires that certain disclosures relating to the termination of a lease be given to the consumer. Which of these disclosures is NOT required?

Accepted Answer

A)  The conditions under which the lease may be terminated before the end of its term 
B)  Whether or not the lessee has the option to purchase the property and at what price 
C)  Whether the lease may be extended at the option of the lessee 
D)  Whether the lessee will be liable for the difference between the estimated value of the property and its realized value at the termination or end of the lease 
A)  The conditions under which the lease may be terminated before the end of its term 
B)  Whether or not the lessee has the option to purchase the property and at what price 
C)  Whether the lease may be extended at the option of the lessee 
D)  Whether the lessee will be liable for the difference between the estimated value of the property and its realized value at the termination or end of the lease

Under HMDA, what is the threshold for reporting the interest rate spread for first lien mortgage loans?

Is the renewal of a loan considered to be a new extension of credit for purposes of valuing the collateral under Regulation U?

Of the following types of data, which one is NOT required to be reported for each application for an originated loan subject to Regulation C?

Creditors must retain for 25 months after the date that an offer of credit is made (12 months for business applicants with gross revenues of $1 million or less) the following items EXCEPT:

By sending an item to a Reserve Bank, a sender:

Which of the following practices is authorized by the Federal Reserve Act?

Which of the following would NOT be acceptable under the Bank Bribery Act and the relevant guidelines?

Which of the following is NOT a requirement when a bank pays an employee a fee for referring a high-net-worth or institutional customer to a broker?

When may a bank pay an overdraft of $5,000 created by an executive officer of the bank?

A subsidiary of First National Bank can legally participate in all but one of the following businesses. In which business may the subsidiary NOT legally participate?

Purpose credit is credit for all of the following EXCEPT:

While Presenting items for payment:

The institution need not provisionally credit the consumer's account if it requires but does not receive written confirmation of oral notice of error or if the error involves an account subject to the margin requirements of ______________.

Which of the following actions is NOT a custodial requirement of the Government Securities Act?

It is a corporation or a non-depository institution that maintains an account with a Reserve Bank

As an alternative to providing a periodic statement, a financial institution holding payroll card accounts may make available:

Which of the following credit arrangements would most likely be considered a purpose credit because it is indirectly secured by margin stock?

What may a creditor do in response to an application for credit from a business with gross revenues of $1 million or less?

The initial disclosure requires that certain disclosures relating to the termination of a lease be given to the consumer. Which of these disclosures is NOT required?

Certified Trust and Financial Advisor

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Exam 1: Certified Regulatory Compliance Manager

Under HMDA, what is the threshold for reporting the interest rate spread for first lien mortgage loans?

Is the renewal of a loan considered to be a new extension of credit for purposes of valuing the collateral under Regulation U?

Of the following types of data, which one is NOT required to be reported for each application for an originated loan subject to Regulation C?

Creditors must retain for 25 months after the date that an offer of credit is made (12 months for business applicants with gross revenues of $1 million or less) the following items EXCEPT:

By sending an item to a Reserve Bank, a sender:

Which of the following practices is authorized by the Federal Reserve Act?

Which of the following would NOT be acceptable under the Bank Bribery Act and the relevant guidelines?

Which of the following is NOT a requirement when a bank pays an employee a fee for referring a high-net-worth or institutional customer to a broker?

When may a bank pay an overdraft of $5,000 created by an executive officer of the bank?

A subsidiary of First National Bank can legally participate in all but one of the following businesses. In which business may the subsidiary NOT legally participate?

Purpose credit is credit for all of the following EXCEPT:

While Presenting items for payment:

The institution need not provisionally credit the consumer's account if it requires but does not receive written confirmation of oral notice of error or if the error involves an account subject to the margin requirements of ______________.

Which of the following actions is NOT a custodial requirement of the Government Securities Act?

It is a corporation or a non-depository institution that maintains an account with a Reserve Bank

As an alternative to providing a periodic statement, a financial institution holding payroll card accounts may make available:

Which of the following credit arrangements would most likely be considered a purpose credit because it is indirectly secured by margin stock?

What may a creditor do in response to an application for credit from a business with gross revenues of $1 million or less?

The initial disclosure requires that certain disclosures relating to the termination of a lease be given to the consumer. Which of these disclosures is NOT required?

Certified Trust and Financial Advisor

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