Question 1

Which of the following elements is NOT required to be in a repurchase agreement between a bank that is a government securities dealer and a counterparty?

Accepted Answer

A)  A statement that the funds are not insured by the FDIC 
B)  A list of the specific securities that are the subject of the agreement 
C)  A provision for substitution of securities if they can be substituted 
D)  A statement that the bank is a regulated government securities dealer

Question 2

John and Elise Fernandez apply to ABC Bank for a loan to purchase a manufactured home. ABC Bank is a community bank with approximately $100 million in assets, and the home would be located outside of the bank's metropolitan area. Mr. and Mrs. Fernandez complete an in-person application for a mobile home that is denied by the bank due to insufficient income. Which piece of information on the Fernandez application is ABC Bank NOT required to report on its HMDA LAR?

Accepted Answer

A)  The ethnicity of the applicants 
B)  The race of the applicants 
C)  The purpose of the loan application 
D)  The metropolitan area where the home will be located

Question 3

Of the following loans made by a national bank, which loan is NOT covered by the OCC ARM regulation?

Accepted Answer

A)  A loan to purchase a single-family dwelling to be used as a residence, secured by the dwelling with an adjustable interest rate 
B)  A loan made to purchase a mobile home to be used as rental property, secured by the home with a variable interest rate 
C)  A loan made to purchase an eight-unit apartment complex, secured by the building, made payable on demand with a variable rate of interest 
D)  A loan made to purchase a duplex, secured by the dwelling, amortized over 15 years with a 5-year maturity, at a variable rate of interest

Question 4

When may an automatically renewable time deposit account be considered for inclusion in the unclaimed property report?

Accepted Answer

A)  When a customer has corresponded with the bank but not made deposits to the account 
B)  When a customer has shown interest in the account but not made deposits to the account 
C)  When a customer does not instruct the bank in writing to roll over the account 
D)  When the customer has not deposited or withdrawn funds from the account or another account at the same bank

Question 5

Which of the following is NOT considered an acceptable form of identification for an individual when completing a CTR?

Accepted Answer

A)  U.S. passport 
B)  Long-term deposit account relationship 
C)  State-issued photo identification (e.g., driver's license) 
D)  Photo identification card issued by a local government agency

Question 6

Your bank's president comes back from an industry conference and tells the compliance officer that she attended a presentation about OFAC. She heard the bank could be fined for not adhering to OFAC requirements. Thus, she has directed that every bank transaction be reviewed for OFAC compliance. What is the most appropriate statement the compliance officer could make to the bank president?

Accepted Answer

A)  The bank is already in compliance because OFAC checks are performed on all new depositors 
B)  The bank has assessed its OFAC risk and has implemented risk-based OFAC procedures 
C)  OFAC does not apply because the bank does not conduct business in foreign countries or with foreign nationals 
D)  Banks are usually not fined for OFAC violations unless they conduct transactions with SDNs or blocked countries

Question 7

The Equal Credit Opportunity Act (ECOA) was enacted in 1974 to prevent discrimination in credit transactions. In 1975 the act was amended. Which of the following prohibited base/s are now included in it?

Accepted Answer

A)  National origin 
B)  Exercise of rights under the Consumer Credit Protection Act 
C)  Receipt of public assistance income 
D)  All of these

Question 8

ACME Bank has a separate page on its Web site where it describes insurance products, such as life insurance and health and disability insurance. The page invites consumers to call the bank officer in charge of selling these products. The Web site's lending page also describes consumer loans and uses the following phrase: "Have peace of mind-credit life and disability insurance are available on all consumer loans to qualified borrowers." Neither the insurance page nor the lending page mentions insured deposits. What does ACME need to do to make sure its Web site is in compliance?

Accepted Answer

A)  Nothing. As long as the insurance products are segregated, the Web site is in compliance. 
B)  Place the advertising disclosures (not a deposit, not insured by the FDIC, and so on) on the insurance page. 
C)  Place the advertising disclosures on both the Web site's insurance page and its lending page. 
D)  Create a separate Web site for all insurance products.

Question 9

Debt collector may not abuse or harass the consumer by:

Accepted Answer

A)  Using or threatening to use violence or to harm the physical person, reputation, or property of any person when collecting a debt 
B)  Using obscene, profane, or abusive language when communicating with anyone 
C)  Allowing a telephone to ring repeatedly or engaging a person in telephone conversations repeatedly with the intent to abuse or harass 
D)  Making telephone calls without meaningful disclosure of the caller's identity

Question 10

If the returned check is an electronic item that is not a representation of a ___________, Reserve Banks will indemnify a bank to which the check is returned if the bank incurs losses as a result of indemnities the bank would be required to make under Regulation CC in connection with a substitute check later created from the returned check. A Reserve Bank will not be liable, however, if the loss could be attributed to a lack of good faith or failure to exercise ordinary care on the part of any person who handled the item.

Accepted Answer

A)  Returning check 
B)  Substitute check 
C)  Cross check 
D)  Retuning item

Question 11

First National's consumer leasing department placed an ad in the local paper that pictured a car with the caption, "Sign a lease with us and pay only $275 per month." What other information must this ad have?

Accepted Answer

A)  A statement that the transaction is not a loan 
B)  The total amount due at consummation or delivery, the number of payments required, and any required security deposit 
C)  The bank's policy regarding the purchase of the property by the lessee 
D)  Disclosures regarding required insurance

Question 12

Which of the following activities is permitted under ADA?

Accepted Answer

A)  Issuing a policy against making loans to health care providers who regularly work with infectious patients 
B)  Prohibiting smoking anywhere in the bank building 
C)  Providing readers to visually impaired loan applicants for a $15 fee 
D)  Requiring disabled depositors to use a teller window that is specially constructed for the use of disabled persons

Question 13

Country A (a foreign country that is boycotting Country B, another foreign country) has ordered goods from ABC, a U.S. corporation. Country A has opened a letter of credit with Overseas, Inc., a foreign bank. The letter of credit specifies that ABC must certify that it does not do business with Country B. Overseas, Inc., sends a telegram to First National Bank, a U.S. bank, stating the major terms and conditions of the letter of credit and asking First National Bank to confirm the letter of credit. The telegram does not state the boycott provisions. Overseas mails the letter of credit to First National Bank and asks First National Bank to confirm it. What may First National Bank do?

Accepted Answer

A)  First National Bank must confirm it if it previously agreed to do so. 
B)  First National Bank may advise ABC of the letter of credit and administer its disposal, but may not confirm it and must report it to the Department of Commerce and the IRS. 
C)  First National Bank may do nothing but return the letter of credit to the issuing bank and report to the IRS. 
D)  First National Bank must confirm the letter of credit but should also report it to the Department of Commerce.

Question 14

Fastfood, Inc., a nationwide restaurant chain, opened an account at First National Bank last year. Fastfood is making daily deposits in amounts of $15,000 to $20,000. First National needs to determine if this company is an exempt person. What should the bank do first?

Accepted Answer

A)  Because the restaurant is an established depositor, the bank should provide an unlimited exemption for cash deposits and withdrawals. 
B)  The bank should look in the newspaper or on the Internet to determine if Fastfood, Inc's, stock appears on one of the listed exchanges. 
C)  The bank should ask the company if it qualifies as a listed business. 
D)  The bank should perform a corporate records check to determine if the company is chartered in the United States.

Question 15

QRS State Bank is being examined under the lending test. Which of the following is the most relevant criteria for the lending test?

Accepted Answer

A)  The distribution of the bank's small business loans 
B)  The racial and gender characteristics of QRS's lending staff 
C)  The location of QRS's branches 
D)  The services QRS offers to its community

Question 16

By what date must the bank send the borrower a statement in connection with an information return on foreclosed or abandoned property?

Accepted Answer

A)  January 15 of the year following the year of the foreclosure or abandonment 
B)  January 31 of the year following the year of the foreclosure or abandonment 
C)  February 28 of the year following the year of the foreclosure or abandonment 
D)  March 1 of the year following the year of the foreclosure or abandonment

Question 17

First National Bank made a loan to a nonbank affiliate of its holding company that is secured by stocks, bonds, and debentures. At the outset of the loan, First National had collateral with a market value equal to 150 percent of the loan amount. Over time, some of the collateral has been retired and amortized. Some has dropped in value. What is the responsibility of the bank regarding the collateral?

Accepted Answer

A)  The bank has no responsibility once the loan is made provided the percentages were correct at the loan's inception. 
B)  The bank must check values every month to ensure that the percentages are correct at all times. 
C)  The bank must check values when the collateral is retired or amortized to make sure the collateral is replaced with securities that will bring the loan into compliance with the percentages required in the law. 
D)  The bank must annually check the value of the collateral to ensure that the percentage of value is maintained.

Question 18

FDIC guidance lists three requirements to ensure compliance with spousal signature rules include all of the following EXCEPT:

Accepted Answer

A)  Review and revise policies Eliminate policies or procedures that are inconsistent with the requirements Expand loan policies and procedures to provide loan staff with specific guidance on state law(s) regarding requiring signatures Cover the laws of all states where the creditor institution does business Create checklists to address situations when spousal signatures can be required 
B)  Provide training to consumer and commercial loan staff 
C)  Implement monitoring and auditing programs to check for spousal signature violations 
D)  Must allow an applicant to designate a birth-given first name and a birth-given, surname, spouse's surname, or combination

Question 19

The OCC recommends all but one of the following actions to help prevent a national bank's purchasing or acquiring predatory or abusive loans. Which practice is NOT recommended?

Accepted Answer

A)  Establish policies on the bank's relationship with third-party brokers and originators 
B)  Review loan documentation 
C)  Audit the third-party broker 
D)  Require the broker to establish a reserve account for legal contingencies

Question 20

Which of the following factors would NOT be considered when evaluating whether specific behavior by a banker violates the statute?

Accepted Answer

A)  The social and family ties of the banker 
B)  The standard for business amenities and entertaining in that particular part of the country 
C)  Whether there was a demonstrable business purpose 
D)  Whether a business transaction was consummated as a result

Exam 1: Certified Regulatory Compliance Manager