Question 1

The compliance program should address plans to verify adherence to applicable regulations through:

Accepted Answer

A)  Ongoing monitoring to evaluate the program, self monitoring and corrective action 
B)  Self monitoring 
C)  Periodic reviews 
D)  Ongoing monitoring to evaluate the program, self monitoring and periodic reviews 
A)  Ongoing monitoring to evaluate the program, self monitoring and corrective action 
B)  Self monitoring 
C)  Periodic reviews 
D)  Ongoing monitoring to evaluate the program, self monitoring and periodic reviews

Question 2

How must most banks submit loan application registers to their federal supervisory agencies?

Accepted Answer

A)  In machine-readable format 
B)  On the standard LAR form 
C)  In three copies with the required transmittal 
D)  In a separate package for each branch loan application 
A)  In machine-readable format 
B)  On the standard LAR form 
C)  In three copies with the required transmittal 
D)  In a separate package for each branch loan application

Question 3

Which of the following is required to be reported on ABC Bank's HMDA LAR?

Accepted Answer

A)  An application from Mr. Welch for a preapproval of a home purchase loan application that is approved by ABC in writing but not accepted by Mr. Welch 
B)  An application from Ms. Ensley for a preapproval of a temporary construction loan that is denied by ABC 
C)  An application from Mr. and Mrs. Rawlings for a preapproval of a home purchase loan application that is denied by ABC 
D)  An application from Ms. Connor for a home equity loan to be used to consolidate credit cards 
A)  An application from Mr. Welch for a preapproval of a home purchase loan application that is approved by ABC in writing but not accepted by Mr. Welch 
B)  An application from Ms. Ensley for a preapproval of a temporary construction loan that is denied by ABC 
C)  An application from Mr. and Mrs. Rawlings for a preapproval of a home purchase loan application that is denied by ABC 
D)  An application from Ms. Connor for a home equity loan to be used to consolidate credit cards

Question 4

It is not required for accounts where the only EFT allowed is a preauthorized transfer to an account. If the account is a passbook account, the bank updates the passbook on presentation; if not, the bank it at least quarterly.

Accepted Answer

A)  A periodic statement 
B)  Change in terms notice 
C)  Unauthorized transfers 
D)  Error resolution notice 
A)  A periodic statement 
B)  Change in terms notice 
C)  Unauthorized transfers 
D)  Error resolution notice

Question 5

During a recent compliance examination, regulators cited the bank for violations of various marketing regulations. How should the compliance professional FIRST respond?

Accepted Answer

A)  Contact the bank's marketing manager to discuss the finding 
B)  Develop a policy requiring that all marketing materials be reviewed and approved by compliance before being published 
C)  Set up a training class for the marketing department 
D)  Review the marketing materials and applicable regulations to verify the finding. 
A)  Contact the bank's marketing manager to discuss the finding 
B)  Develop a policy requiring that all marketing materials be reviewed and approved by compliance before being published 
C)  Set up a training class for the marketing department 
D)  Review the marketing materials and applicable regulations to verify the finding.

Question 6

When is it permissible for a bank that is a government securities broker or dealer to refrain from filing a Form G-FIN-5 or a Form MSD-5 when an employee terminates the associated person status?

Accepted Answer

A)  When the employee files the form 
B)  When the bank does not have all the necessary information and notifies its regulatory agency 
C)  When the employee's status is reinstated within six months 
D)  When the employee remains employed by the bank and the bank notifies its regulatory agency 
A)  When the employee files the form 
B)  When the bank does not have all the necessary information and notifies its regulatory agency 
C)  When the employee's status is reinstated within six months 
D)  When the employee remains employed by the bank and the bank notifies its regulatory agency

Question 7

Several types of loan-related data appear in the following list. Which type of data is NOT required to be reported under HMDA?

Accepted Answer

A)  Data on multifamily housing 
B)  Data on unsecured home improvement loans 
C)  Data on refinancings of home purchase loans 
D)  Data on loans to purchase residential lots 
A)  Data on multifamily housing 
B)  Data on unsecured home improvement loans 
C)  Data on refinancings of home purchase loans 
D)  Data on loans to purchase residential lots

Question 8

In Consumer Leasing Act Content of non-segregated disclosures may be made separately or as part of another document (such as the lease agreement); however, other information cannot be stated, used, or placed so as to mislead or confuse the consumer. Other disclosures include all of the following EXCEPT:

Accepted Answer

A)  A statement of the conditions under which the lessee or lessor may terminate the lease before the end of the lease term, along with the amount (or a description of the method of how the amount is determined) of any penalty or other charge for early termination 
B)  Whether the lessee has the option to purchase the leased property during the lease term and, if applicable, the purchase price (or method for determining it) and when the lessee may exercise it 
C)  The lessee's right to an independent appraisal of the property if the lessee's liability at the end of the lease is based on the realized value of the leased property, and that the appraisal will be binding on all parties 
D)  A statement of maintenance responsibilities including the counter bank responsible and a description of the responsibility 
A)  A statement of the conditions under which the lessee or lessor may terminate the lease before the end of the lease term, along with the amount (or a description of the method of how the amount is determined) of any penalty or other charge for early termination 
B)  Whether the lessee has the option to purchase the leased property during the lease term and, if applicable, the purchase price (or method for determining it) and when the lessee may exercise it 
C)  The lessee's right to an independent appraisal of the property if the lessee's liability at the end of the lease is based on the realized value of the leased property, and that the appraisal will be binding on all parties 
D)  A statement of maintenance responsibilities including the counter bank responsible and a description of the responsibility

Question 9

Under the ADA, what can an employer do?

Accepted Answer

A)  Inquire about a disability if the disability is obvious to the interviewer at the time of the job interview 
B)  Inquire about a disability when offering a job provided the disability is related to the job requirements 
C)  Refuse to make an accommodation for a disability if 50 persons or fewer are employed 
D)  Note the disability in the employee's file so that other managers will be aware of it when interviewing the employee for future position changes 
A)  Inquire about a disability if the disability is obvious to the interviewer at the time of the job interview 
B)  Inquire about a disability when offering a job provided the disability is related to the job requirements 
C)  Refuse to make an accommodation for a disability if 50 persons or fewer are employed 
D)  Note the disability in the employee's file so that other managers will be aware of it when interviewing the employee for future position changes

Question 10

Second State Bank offers a mortgage product that involves simultaneous second lien loans. These include a first lien for up to 90 percent of the purchase price and a second loan for the down payment, secured by a second lien on the property. The bank would like to be in full compliance with the Interagency Guidance on Nontraditional Mortgage Product Risks. Which of the following should Second State Bank incorporate into its loan program?

Accepted Answer

A)  Risk management procedures to measure the risk of all simultaneous second lien loans and report results to management 
B)  A 100 percent loan loss reserve on all simultaneous second lien loans 
C)  A product combining simultaneous second lien loans with negative amortization features made to nonowner occupied borrowers 
D)  A prepayment penalty on all simultaneous second lien loans 
A)  Risk management procedures to measure the risk of all simultaneous second lien loans and report results to management 
B)  A 100 percent loan loss reserve on all simultaneous second lien loans 
C)  A product combining simultaneous second lien loans with negative amortization features made to nonowner occupied borrowers 
D)  A prepayment penalty on all simultaneous second lien loans

Question 11

Under content of disclosures long term disclosures may include the following, as applicable EXCLUDING:

Accepted Answer

A)  Notification that the product is optional 
B)  Explanation of debt-suspension agreement 
C)  Lump-sum payment of fee with no refund 
D)  Refund of fee paid in lump sum 
A)  Notification that the product is optional 
B)  Explanation of debt-suspension agreement 
C)  Lump-sum payment of fee with no refund 
D)  Refund of fee paid in lump sum

Question 12

First National Bank has foreclosed on several loans. One of the loans is not subject to the requirement to submit an information return on the foreclosed property. Which loan is most likely NOT covered by the regulations?

Accepted Answer

A)  A loan to Brown & Associates, a local law firm, to purchase furniture, secured by the furniture 
B)  A loan to Mrs. Lynch to purchase stereo equipment for use in her office waiting room 
C)  A loan to Dr. Stevens to purchase kitchen appliances 
D)  A loan to Mr. and Mrs. Sanders to purchase a computer for their antique shop 
A)  A loan to Brown & Associates, a local law firm, to purchase furniture, secured by the furniture 
B)  A loan to Mrs. Lynch to purchase stereo equipment for use in her office waiting room 
C)  A loan to Dr. Stevens to purchase kitchen appliances 
D)  A loan to Mr. and Mrs. Sanders to purchase a computer for their antique shop

Question 13

Regulation B defines "elderly" as having attained an age of how many years?

Accepted Answer

A)  55 
B)  59½ 
C)  62 
D)  70½ 
A)  55 
B)  59½ 
C)  62 
D)  70½

Question 14

Short-form disclosures are required in advertisements and promotional materials unless the advertisements and promotional materials are of:

Accepted Answer

A)  A general nature describing or listing the products or services offered by the bank 
B)  A specific nature describing or listing the products or services offered by the bank 
C)  A general nature describing or special services offered by the bank 
D)  A general nature describing competitive advantage of the bank 
A)  A general nature describing or listing the products or services offered by the bank 
B)  A specific nature describing or listing the products or services offered by the bank 
C)  A general nature describing or special services offered by the bank 
D)  A general nature describing competitive advantage of the bank

Question 15

The sender agrees to indemnify each Reserve Bank for:

Accepted Answer

A)  Any loss or expense resulting from sender's lack of authority 
B)  Any action taken by the Reserve Bank within the scope of its authority in the handling of the item 
C)  An electronic item that is not a substitute check is not liable for any amount paid by a Reserve Bank that is attributable to the Reserve Bank's own lack of good faith or failure to exercise ordinary care 
D)  Any warranty made by the Reserve Bank under Regulation J, Regulation CC, or the UCC 
A)  Any loss or expense resulting from sender's lack of authority 
B)  Any action taken by the Reserve Bank within the scope of its authority in the handling of the item 
C)  An electronic item that is not a substitute check is not liable for any amount paid by a Reserve Bank that is attributable to the Reserve Bank's own lack of good faith or failure to exercise ordinary care 
D)  Any warranty made by the Reserve Bank under Regulation J, Regulation CC, or the UCC

Question 16

__________________ is a transfer that is authorized in advance to occur at substantially regular intervals. Payments that require the consumer to take specific actions to initiate them (such as by entering instructions on a touch-tone telephone or on the Internet) are not such type of EFTs.

Accepted Answer

A)  A preauthorized EFT 
B)  A postauthorized EFT 
C)  A standard format EFT 
D)  A customized EFT 
A)  A preauthorized EFT 
B)  A postauthorized EFT 
C)  A standard format EFT 
D)  A customized EFT

Question 17

Under Interagency Guidance on Subprime Lending (1999) lending policy must:

Accepted Answer

A)  Be appropriate to the size and complexity of the operation 
B)  Address the types of products offers and those not authorized 
C)  Require credit file documentation 
D)  All of these 
A)  Be appropriate to the size and complexity of the operation 
B)  Address the types of products offers and those not authorized 
C)  Require credit file documentation 
D)  All of these

Question 18

Which of the following is NOT a factor considered by the Federal Reserve Board when it evaluates an application under Regulation Y?

Accepted Answer

A)  The financial strength of the applicant 
B)  The management strength of the applicant 
C)  The current nonbanking activities of the applicant 
D)  The effect of the transaction on competition 
A)  The financial strength of the applicant 
B)  The management strength of the applicant 
C)  The current nonbanking activities of the applicant 
D)  The effect of the transaction on competition

Question 19

Which of the following must a "large" bank maintain as part of its CRA program?

Accepted Answer

A)  Listing of director, officer, and employee community involvement, and a listing of loans made to low- and moderate-income individuals 
B)  Description of its assessment area, written comments and responses, and the public portion of the regulator's most recent CRA performance evaluation 
C)  Copy of the bank's CRA Notice and the bank's most recent five years of CRA disclosure statements 
D)  A comprehensive record of all CRA-related training completed by employees during the past two years 696 AMERICAN BANKERS ASSOCIATION 
A)  Listing of director, officer, and employee community involvement, and a listing of loans made to low- and moderate-income individuals 
B)  Description of its assessment area, written comments and responses, and the public portion of the regulator's most recent CRA performance evaluation 
C)  Copy of the bank's CRA Notice and the bank's most recent five years of CRA disclosure statements 
D)  A comprehensive record of all CRA-related training completed by employees during the past two years 696 AMERICAN BANKERS ASSOCIATION

Question 20

A bank municipal securities dealer has 30 employees in its municipal securities operation. How many municipal securities principals must it have?

Accepted Answer

A)  At least one 
B)  At least three 
C)  No more than five 
D)  At least two 
A)  At least one 
B)  At least three 
C)  No more than five 
D)  At least two

The compliance program should address plans to verify adherence to applicable regulations through:

How must most banks submit loan application registers to their federal supervisory agencies?

Which of the following is required to be reported on ABC Bank's HMDA LAR?

It is not required for accounts where the only EFT allowed is a preauthorized transfer to an account. If the account is a passbook account, the bank updates the passbook on presentation; if not, the bank it at least quarterly.

During a recent compliance examination, regulators cited the bank for violations of various marketing regulations. How should the compliance professional FIRST respond?

When is it permissible for a bank that is a government securities broker or dealer to refrain from filing a Form G-FIN-5 or a Form MSD-5 when an employee terminates the associated person status?

Several types of loan-related data appear in the following list. Which type of data is NOT required to be reported under HMDA?

Under the ADA, what can an employer do?

Under content of disclosures long term disclosures may include the following, as applicable EXCLUDING:

First National Bank has foreclosed on several loans. One of the loans is not subject to the requirement to submit an information return on the foreclosed property. Which loan is most likely NOT covered by the regulations?

Regulation B defines "elderly" as having attained an age of how many years?

Short-form disclosures are required in advertisements and promotional materials unless the advertisements and promotional materials are of:

The sender agrees to indemnify each Reserve Bank for:

__________________ is a transfer that is authorized in advance to occur at substantially regular intervals. Payments that require the consumer to take specific actions to initiate them (such as by entering instructions on a touch-tone telephone or on the Internet) are not such type of EFTs.

Under Interagency Guidance on Subprime Lending (1999) lending policy must:

Which of the following is NOT a factor considered by the Federal Reserve Board when it evaluates an application under Regulation Y?

Which of the following must a "large" bank maintain as part of its CRA program?

A bank municipal securities dealer has 30 employees in its municipal securities operation. How many municipal securities principals must it have?

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Exam 1: Certified Regulatory Compliance Manager

The compliance program should address plans to verify adherence to applicable regulations through:

How must most banks submit loan application registers to their federal supervisory agencies?

Which of the following is required to be reported on ABC Bank's HMDA LAR?

It is not required for accounts where the only EFT allowed is a preauthorized transfer to an account. If the account is a passbook account, the bank updates the passbook on presentation; if not, the bank it at least quarterly.

During a recent compliance examination, regulators cited the bank for violations of various marketing regulations. How should the compliance professional FIRST respond?

When is it permissible for a bank that is a government securities broker or dealer to refrain from filing a Form G-FIN-5 or a Form MSD-5 when an employee terminates the associated person status?

Several types of loan-related data appear in the following list. Which type of data is NOT required to be reported under HMDA?

Under the ADA, what can an employer do?

Under content of disclosures long term disclosures may include the following, as applicable EXCLUDING:

First National Bank has foreclosed on several loans. One of the loans is not subject to the requirement to submit an information return on the foreclosed property. Which loan is most likely NOT covered by the regulations?

Regulation B defines "elderly" as having attained an age of how many years?

Short-form disclosures are required in advertisements and promotional materials unless the advertisements and promotional materials are of:

The sender agrees to indemnify each Reserve Bank for:

__________________ is a transfer that is authorized in advance to occur at substantially regular intervals. Payments that require the consumer to take specific actions to initiate them (such as by entering instructions on a touch-tone telephone or on the Internet) are not such type of EFTs.

Under Interagency Guidance on Subprime Lending (1999) lending policy must:

Which of the following is NOT a factor considered by the Federal Reserve Board when it evaluates an application under Regulation Y?

Which of the following must a "large" bank maintain as part of its CRA program?

A bank municipal securities dealer has 30 employees in its municipal securities operation. How many municipal securities principals must it have?

Certified Trust and Financial Advisor

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