Question 1

What may a creditor do if an applicant applies for individual unsecured credit?

Accepted Answer

A)  A creditor may never require the signature of another person. 
B)  A creditor may ask for the signature of the applicant's spouse if the applicant is not creditworthy. 
C)  A creditor may require another signature if the applicant relies on jointly owned property to establish creditworthiness. 
D)  A creditor may ask the applicant to withdraw the application if it does not meet the creditor's credit standards. 
A)  A creditor may never require the signature of another person. 
B)  A creditor may ask for the signature of the applicant's spouse if the applicant is not creditworthy. 
C)  A creditor may require another signature if the applicant relies on jointly owned property to establish creditworthiness. 
D)  A creditor may ask the applicant to withdraw the application if it does not meet the creditor's credit standards.

Question 2

Which of the following should be done during research and interpreting regulations Compliance professionals in mitigating compliance risk?

Accepted Answer

A)  Track regulatory proposals 
B)  Implementing final regulatory rules 
C)  Understanding the business units' operating environment and risk tolerance 
D)  Ranking solutions as high, moderate and low risk 
A)  Track regulatory proposals 
B)  Implementing final regulatory rules 
C)  Understanding the business units' operating environment and risk tolerance 
D)  Ranking solutions as high, moderate and low risk

Question 3

When returning items to a Reserve Bank, the paying and returning banks:

Accepted Answer

A)  Cannot disclaim the warranties, authorizations, and agreements whether or not the returned check bears an endorsement of the paying bank or returning bank 
B)  Authorize the Reserve Bank to handle the item in accordance with Regulation J and the operating circulars 
C)  Warrant that the check bears all endorsements applied by all parties that handled the check in paper or electronic form 
D)  will not be liable for the failure of a paying bank, collecting bank, or a nonbank payer to pay for an item 
A)  Cannot disclaim the warranties, authorizations, and agreements whether or not the returned check bears an endorsement of the paying bank or returning bank 
B)  Authorize the Reserve Bank to handle the item in accordance with Regulation J and the operating circulars 
C)  Warrant that the check bears all endorsements applied by all parties that handled the check in paper or electronic form 
D)  will not be liable for the failure of a paying bank, collecting bank, or a nonbank payer to pay for an item

Question 4

Which of the following employment practices is NOT legal under ADA?

Accepted Answer

A)  Establishing a policy that prohibits hiring alcoholic applicants 
B)  Establishing a policy that prohibits smoking at any time at work 
C)  Holding employees who are certified alcoholics to the same performance standards as other employees 
D)  Refusing to hire an employee who currently uses illegal drugs 
A)  Establishing a policy that prohibits hiring alcoholic applicants 
B)  Establishing a policy that prohibits smoking at any time at work 
C)  Holding employees who are certified alcoholics to the same performance standards as other employees 
D)  Refusing to hire an employee who currently uses illegal drugs

Question 5

The mortgage lending department of Bank XYZ received some inquiries from potential applicants who are visually impaired. The bank would like to comply with ADA concerning these potential applicants, but it does not want to spend a significant amount of money. Which of the following statements is true?

Accepted Answer

A)  The bank must have its loan application and disclosures translated into Braille. 
B)  The bank may have a loan assistant read each loan application and disclosure document to the applicant and assist in completion of the forms. 
C)  The bank may require the applicant to bring a sighted friend or relative to the bank to assist in completing the application. 
D)  The bank may make a policy not to lend money to blind persons. 
A)  The bank must have its loan application and disclosures translated into Braille. 
B)  The bank may have a loan assistant read each loan application and disclosure document to the applicant and assist in completion of the forms. 
C)  The bank may require the applicant to bring a sighted friend or relative to the bank to assist in completing the application. 
D)  The bank may make a policy not to lend money to blind persons.

Question 6

Content of segregated disclosures in Consumer Leasing Act include all of the following EXCEPT:

Accepted Answer

A)  Amount due at lease signing or delivery, itemized by type and amount, including: Refundable security deposit Advance monthly or other periodic payment Capitalized cost reduction An itemization of how the amount due will be paid, by type and amount (only required in a motor vehicle lease), using the model form 
B)  Number, amount, and due date of payments scheduled and the total amount of periodic payments 
C)  In an open-end lease, the descriptive statement "You will owe an additional amount if the actual value of the vehicle is less than the residual value" 
D)  If there are multiple items of property, the property description may be separate 
A)  Amount due at lease signing or delivery, itemized by type and amount, including: Refundable security deposit Advance monthly or other periodic payment Capitalized cost reduction An itemization of how the amount due will be paid, by type and amount (only required in a motor vehicle lease), using the model form 
B)  Number, amount, and due date of payments scheduled and the total amount of periodic payments 
C)  In an open-end lease, the descriptive statement "You will owe an additional amount if the actual value of the vehicle is less than the residual value" 
D)  If there are multiple items of property, the property description may be separate

Question 7

In which of the following cases would First National Bank be required to give a branch closing notice?

Accepted Answer

A)  Removing its ATM from the local grocery store 
B)  Opening a deposit-taking facility in a kiosk during a college fair for one weekend 
C)  Moving its central branch across the street 
D)  Closing its near-town neighborhood branch 
A)  Removing its ATM from the local grocery store 
B)  Opening a deposit-taking facility in a kiosk during a college fair for one weekend 
C)  Moving its central branch across the street 
D)  Closing its near-town neighborhood branch

Question 8

The Fair Credit Reporting Act (FCRA) became effective in 1971. The purpose of FCRA is to regulate:

Accepted Answer

A)  The consumer credit reporting and related industries to ensure that consumer information is reported in an accurate manner 
B)  The consumer credit reporting and related industries to ensure that consumer information is reported in a timely manner 
C)  The consumer credit reporting and related industries to ensure that consumer information is reported in an accurate, timely, and complete manner 
D)  None of these 
A)  The consumer credit reporting and related industries to ensure that consumer information is reported in an accurate manner 
B)  The consumer credit reporting and related industries to ensure that consumer information is reported in a timely manner 
C)  The consumer credit reporting and related industries to ensure that consumer information is reported in an accurate, timely, and complete manner 
D)  None of these

Question 9

An exempted borrower is a member of a national securities exchange or a registered broker or dealer who:

Accepted Answer

A)  Maintains at least 1,000 active accounts annually for persons other than brokers, dealers, and persons associated with brokers and dealers 
B)  Earns at least $10 million in gross revenues on an annual basis from transactions with persons other than brokers, dealers, and persons associated with brokers and dealers, or 
C)  Earns at least 10 percent of its gross revenues on an annual basis from transactions with persons other than brokers, dealers, and persons associated with brokers and dealers 
D)  None of these 
A)  Maintains at least 1,000 active accounts annually for persons other than brokers, dealers, and persons associated with brokers and dealers 
B)  Earns at least $10 million in gross revenues on an annual basis from transactions with persons other than brokers, dealers, and persons associated with brokers and dealers, or 
C)  Earns at least 10 percent of its gross revenues on an annual basis from transactions with persons other than brokers, dealers, and persons associated with brokers and dealers 
D)  None of these

Question 10

Which of the following sources is the least desirable to use when monitoring a correspondent bank's capital?

Accepted Answer

A)  A national rating agency's report on the correspondent bank 
B)  The correspondent bank's own call report 
C)  The correspondent bank's annual report to shareholders 
D)  A national newspaper's story on the correspondent bank's financial condition 
A)  A national rating agency's report on the correspondent bank 
B)  The correspondent bank's own call report 
C)  The correspondent bank's annual report to shareholders 
D)  A national newspaper's story on the correspondent bank's financial condition

Question 11

It is an extension of credit will be deemed to be made to an insider if the proceeds are transferred to the insider or used for the insider's benefit. This rule does not apply if the credit is made on substantially the same terms and conditions as those made to a noninsider and if the proceeds are used in a bona fide transaction involving the acquisition of property, goods, or services from the insider. What is it?

Accepted Answer

A)  Tangible economic benefit rule012 CFR 215.3(f) 
B)  Extension of credit-12 CFR 215.3 
C)  Lending restrictions 
D)  Intangible economic-benefit rule 
A)  Tangible economic benefit rule012 CFR 215.3(f) 
B)  Extension of credit-12 CFR 215.3 
C)  Lending restrictions 
D)  Intangible economic-benefit rule

Question 12

A Reserve Bank may present a noncash item for payment if instructed to do so by the sender and if the:

Accepted Answer

A)  Item provides that it must be presented for acceptance 
B)  Item is payable elsewhere than at the residence or business of the payor 
C)  Item sent directly to the paying bank or the nonbank payor 
D)  Date of payment of the item depends on presentment for acceptance 
A)  Item provides that it must be presented for acceptance 
B)  Item is payable elsewhere than at the residence or business of the payor 
C)  Item sent directly to the paying bank or the nonbank payor 
D)  Date of payment of the item depends on presentment for acceptance

Question 13

To be effective, compliance risk management professionals must design a framework to ensure that bank management understands the risks and the steps that must be taken to mitigate them. The many roles compliance professionals fill incorporate risk management aspects including:

Accepted Answer

A)  Coordinating regulatory exams to explain risks to examiners 
B)  Overseeing compliance training targeting higher risk areas 
C)  Tracking regulatory proposals and final rules to understand new risks 
D)  All of these 
A)  Coordinating regulatory exams to explain risks to examiners 
B)  Overseeing compliance training targeting higher risk areas 
C)  Tracking regulatory proposals and final rules to understand new risks 
D)  All of these

Question 14

When does a gift accepted by a banker clearly violate the Bank Bribery Act?

Accepted Answer

A)  When it is given for personal reasons 
B)  When it is given with corrupt intent 
C)  When it is valued at a dollar amount exceeding $50 
D)  When it is not given in connection with a generally accepted holiday 
A)  When it is given for personal reasons 
B)  When it is given with corrupt intent 
C)  When it is valued at a dollar amount exceeding $50 
D)  When it is not given in connection with a generally accepted holiday

Question 15

Big Nationwide Bank has decided to close one of its smaller branches in Texas. A community association from the small town where the branch is located is not pleased with the decision because Big Nationwide's branch is the only financial institution in the small town. The community group complains to the federal agency that regulates Big Nationwide. What must Big Nationwide do in light of this protest against its decision to close the branch?

Accepted Answer

A)  Re-post the notice and wait an additional 90 days 
B)  Send the federal agency a detailed statistical analysis that is consistent with its branch closing policy and that proves why closing the branch is economically necessary 
C)  Meet with the community group, explain their reasoning, and help the group find some alternative financial services 
D)  Nothing is required 
A)  Re-post the notice and wait an additional 90 days 
B)  Send the federal agency a detailed statistical analysis that is consistent with its branch closing policy and that proves why closing the branch is economically necessary 
C)  Meet with the community group, explain their reasoning, and help the group find some alternative financial services 
D)  Nothing is required

Question 16

Which of the following is/are included in the persons covered under Fedwire transfer coverage?

Accepted Answer

A)  Reserve Banks sending or receiving payment orders 
B)  Senders of payments to a Reserve Bank 
C)  Banks receiving payments from a Reserve Bank 
D)  None of these 
A)  Reserve Banks sending or receiving payment orders 
B)  Senders of payments to a Reserve Bank 
C)  Banks receiving payments from a Reserve Bank 
D)  None of these

Question 17

An institution must take steps to determine that information is lawfully made available to the public, including a determination:

Accepted Answer

A)  That it includes Federal, state and local government records 
B)  That the information is of the type that is available to the public 
C)  Whether the individual can direct that the information not be made available to the public, and, if so, that the consumer has not done so 
D)  That a list of names, addresses of consumers of an organization that is not a financial institution 
A)  That it includes Federal, state and local government records 
B)  That the information is of the type that is available to the public 
C)  Whether the individual can direct that the information not be made available to the public, and, if so, that the consumer has not done so 
D)  That a list of names, addresses of consumers of an organization that is not a financial institution

Question 18

A bank has a large mortgage department as well as a high HMDA error rate. An expensive software program could automate the process, but the business unit manager does not want to purchase the software because of its expense. Though it is not as efficient, the manager prefers to make some improvements to the manual process, add some more robust monitoring procedures, and opt not to purchase the software. What should the compliance professional do?

Accepted Answer

A)  Elevate the issue to a higher authority to force the mortgage department unit to purchase the software 
B)  Nothing; the compliance professional's job is done with the completed research 
C)  Document the fact that the level of risk present with manual systems is acceptable to the mortgage department business unit 
D)  Write a memo to the president of the bank that explains the risk assessment for this area 
A)  Elevate the issue to a higher authority to force the mortgage department unit to purchase the software 
B)  Nothing; the compliance professional's job is done with the completed research 
C)  Document the fact that the level of risk present with manual systems is acceptable to the mortgage department business unit 
D)  Write a memo to the president of the bank that explains the risk assessment for this area

Question 19

A routine review of account records reveals that suspicious activity involving foreign currency has occurred in the account of one of the bank's directors. Which of the following actions should be taken FIRST?

Accepted Answer

A)  A SAR should be filed. 
B)  The bank's board of directors should discuss the account activity without the affected director being present. 
C)  The bank's president should meet with the affected director to discuss the account activity. 
D)  The bank should file a CTR, checking the box that indicates the report is for suspicious activity. 
A)  A SAR should be filed. 
B)  The bank's board of directors should discuss the account activity without the affected director being present. 
C)  The bank's president should meet with the affected director to discuss the account activity. 
D)  The bank should file a CTR, checking the box that indicates the report is for suspicious activity.

Question 20

There is no established template for documenting compliance risk. Each institution should develop a risk assessment that fits its risk profile. The components that are commonly used throughout the industry are as follows EXCEPT:

Accepted Answer

A)  Risk assessment 
B)  Measuring key risk indicators 
C)  Identifying key performance indicators 
D)  Training the leadership of compliance regulation program 
A)  Risk assessment 
B)  Measuring key risk indicators 
C)  Identifying key performance indicators 
D)  Training the leadership of compliance regulation program

What may a creditor do if an applicant applies for individual unsecured credit?

Which of the following should be done during research and interpreting regulations Compliance professionals in mitigating compliance risk?

When returning items to a Reserve Bank, the paying and returning banks:

Which of the following employment practices is NOT legal under ADA?

Content of segregated disclosures in Consumer Leasing Act include all of the following EXCEPT:

In which of the following cases would First National Bank be required to give a branch closing notice?

The Fair Credit Reporting Act (FCRA) became effective in 1971. The purpose of FCRA is to regulate:

An exempted borrower is a member of a national securities exchange or a registered broker or dealer who:

Which of the following sources is the least desirable to use when monitoring a correspondent bank's capital?

A Reserve Bank may present a noncash item for payment if instructed to do so by the sender and if the:

To be effective, compliance risk management professionals must design a framework to ensure that bank management understands the risks and the steps that must be taken to mitigate them. The many roles compliance professionals fill incorporate risk management aspects including:

When does a gift accepted by a banker clearly violate the Bank Bribery Act?

Which of the following is/are included in the persons covered under Fedwire transfer coverage?

An institution must take steps to determine that information is lawfully made available to the public, including a determination:

A routine review of account records reveals that suspicious activity involving foreign currency has occurred in the account of one of the bank's directors. Which of the following actions should be taken FIRST?

There is no established template for documenting compliance risk. Each institution should develop a risk assessment that fits its risk profile. The components that are commonly used throughout the industry are as follows EXCEPT:

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Exam 1: Certified Regulatory Compliance Manager

What may a creditor do if an applicant applies for individual unsecured credit?

Which of the following should be done during research and interpreting regulations Compliance professionals in mitigating compliance risk?

When returning items to a Reserve Bank, the paying and returning banks:

Which of the following employment practices is NOT legal under ADA?

Content of segregated disclosures in Consumer Leasing Act include all of the following EXCEPT:

In which of the following cases would First National Bank be required to give a branch closing notice?

The Fair Credit Reporting Act (FCRA) became effective in 1971. The purpose of FCRA is to regulate:

An exempted borrower is a member of a national securities exchange or a registered broker or dealer who:

Which of the following sources is the least desirable to use when monitoring a correspondent bank's capital?

A Reserve Bank may present a noncash item for payment if instructed to do so by the sender and if the:

To be effective, compliance risk management professionals must design a framework to ensure that bank management understands the risks and the steps that must be taken to mitigate them. The many roles compliance professionals fill incorporate risk management aspects including:

When does a gift accepted by a banker clearly violate the Bank Bribery Act?

Which of the following is/are included in the persons covered under Fedwire transfer coverage?

An institution must take steps to determine that information is lawfully made available to the public, including a determination:

A routine review of account records reveals that suspicious activity involving foreign currency has occurred in the account of one of the bank's directors. Which of the following actions should be taken FIRST?

There is no established template for documenting compliance risk. Each institution should develop a risk assessment that fits its risk profile. The components that are commonly used throughout the industry are as follows EXCEPT:

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