Question 1

On March 1, First National Bank opened three accounts: 1) a savings account for Margaret Nelson, who did not have a TIN but signed a certification that she had applied for one; 2) a money market savings account for Linda Miller, who could not remember her TIN but promised to provide it at the earliest possible date; and 3) a certificate of deposit for John Whiteside, who completed a Form W-9 but provided a TIN with only eight numbers. Ms. Nelson provided her newly acquired TIN to the bank on April 15, Ms. Miller provided her TIN on April 5, and Mr. Whiteside provided his TIN to the bank on March 10. Interest was paid on all of these accounts on March 31, and the bank withheld 28 percent of the interest payments. On April 20 all the payees requested that the withheld interest be refunded. What should the bank do?

Accepted Answer

A)  Refund the withheld interest to all payees 
B)  Refund to Ms. Nelson and Mr. Whiteside because the interest was erroneously withheld 
C)  Refund only to Mr. Whiteside because the interest was erroneously withheld 
D)  Refund only to Ms. Nelson because the interest was erroneously withheld

Question 2

Martha Whitmire, the BSA Compliance Officer for First National Bank, is responsible for monitoring the bank's daily currency activity and wire transfers, for compliance with information retention and reporting requirements. Ms. Whitmire notices during her review on March 10 that, during the previous two weeks, a transaction occurred on the same account several times during the week. The activity appeared at one branch office as cash deposits in dollar amounts under the reporting thresholds. Ms. Whitmire discusses this activity with the branch manager and determines that this same deposit activity occurred several times during the previous six weeks. She then conducts a more extensive examination of the account's activity for several months and discovers that cash deposits were made at one branch office and purchases of bank cashiers checks were made by withdrawals from the same account at a different branch office. All withdrawals and purchases of cashier's checks were for the identical amount as the cash deposits. Which statement best describes Ms. Whitmire's responsibility?

Accepted Answer

A)  Complete a CTR for each of the cash activities at the branch office 
B)  Make no report of the activities because the transactions were not discovered until after the 15-day reporting deadline 
C)  Report the account activity to senior management for further review 
D)  Report the account activity as suspicious account activity and recommend that a SAR be filed

Question 3

Mr. Roberts has three loans at First National Bank: Loan A made to purchase a car, secured by the car; Loan B made to purchase stock, secured by a lake lot; and Loan C made to pay taxes, secured by a rental house he owns. Last year he paid $2,500 in interest on Loan A; $550 in interest on Loan B; and $1,000 in interest on Loan C. How much interest will First National Bank report to the IRS?

Accepted Answer

A)  $4,050 
B)  $1,000 
C)  $1,550 
D)  $2,500

Question 4

ACME National bank uses telephone solicitations to sell its debt cancellation contracts. The banker explains to the borrower the nature of the contract, gives an oral short form disclosure, receives the customer's affirmative election orally, and sends the written long form disclosures and written affirmative election within three business days. Is the bank in compliance with the telephone solicitation rules as they apply to affirmative elections?

Accepted Answer

A)  Yes, the bank has fulfilled all of its requirements. 
B)  No, oral affirmative elections are not acceptable. 
C)  No, the bank also must give the customer 30 days to cancel the contract. 
D)  No, telephone solicitations are not allowed for debt cancellation contracts.

Question 5

Records that must be retained for deposit accounts include which of the following?

Accepted Answer

A)  Average daily balance 
B)  Overdraft history 
C)  All amounts of currency deposited or withdrawn 
D)  Customer's TIN

Question 6

This is a loan term or an arrangement that modifies a loan term under which a bank agrees to cancel all or part of a customer's loan obligation on the occurrence of a specified event. It may be included as a part of the loan documents, or it may be a separate agreement. What is it?

Accepted Answer

A)  Debt suspension agreement (DS
A)  
B)  Anti-dying 
C)  Debt cancellation contract (DC
C)  
D)  ALLL

Question 7

The Reserve Bank may recover by charging any account on its books maintained by the sender if:

Accepted Answer

A)  The Reserve Bank makes written demand to sender to assume defense of the proceeding 
B)  Any action by the Reserve Bank within is the scope of its authority in handling the item 
C)  The sender has not made any other payment arrangement acceptable to the Reserve Bank 
D)  There is any warranty made by the Reserve Bank

Question 8

An individual comes into the bank and makes a $6,000 cash deposit into a checking account. At the same time, the individual buys a $7,000 cashier's check with cash. According to the Bank Secrecy Act, what is the bank is required to do?

Accepted Answer

A)  File a SAR for $13,000 
B)  File a CTR for the $6,000 cash deposit 
C)  Aggregate the transactions and retain information about the purchase of the cashier's check 
D)  Obtain the recordkeeping information for the purchase of the cashier's check and complete a CTR for the total cash-in transaction of $13,000

Question 9

In a motor vehicle lease, a mathematical progression showing how the periodic payment is derived, containing the following information:

Accepted Answer

A)  Gross capitalized cost (including the agreed-on value of the vehicle) 
B)  Rent charge (the difference between the total of base payment over the lease term minus the depreciation and any amortized amounts) 
C)  Itemization of other charges that are part of the periodic payment 
D)  All of the above

Question 10

Mrs. Franklin has two mortgage loans at First National Bank on which she makes monthly payments. On Loan A she made 13 payments last year, mailing the last payment on December 28. It was received the afternoon of January 2 and credited on January 3. The amount of interest paid on Loan A in the first 12 payments was $1,000. There was $155 of interest on the 13th payment. On Loan B, she made 12 payments; each contained interest accrued to the fourth day of the month. The last payment was mailed on December 19 and was received and credited on December 23. The last payment contained interest accrued to January 4. The total interest paid on Loan B was $2,000, of which $100 accrued between January 1 and January 4 of the next year. How much interest must First National Bank report?

Accepted Answer

A)  $1,155 for Loan A and $2,000 for Loan B 
B)  $1,155 for Loan A and $2,100 for Loan B 
C)  $1,000 for Loan A and $2,000 for Loan B 
D)  $1,000 for Loan A and $2,100 for Loan B

Question 11

Bob's wife is HIV-positive due to a blood transfusion during an appendectomy 15 years ago. She is not yet sick, but takes medication to prevent the onset of AIDS. Bob occasionally needs to take time off from work to take her for testing at Johns Hopkins in Baltimore. Because of complaints about Bob's exposure to this disease, employees have asked HR to limit his contact with them and with customers. The bank has asked Bob not to eat in the lunchroom with the other employees and has placed Bob in a position where he has limited customer contact. Does this company have any potential ADA liability?

Accepted Answer

A)  No. Bob's exposure to HIV could endanger other employees and customers 
B)  No. Because the hiring manager does not know that Bob actually has HIV or AIDS, there is no liability 
C)  Yes. Because the manager has associated Bob with this disease, the "associated with" rule applies 
D)  Yes. Because the manager has regarded Bob as having a disability, he has been "regarded as" disabled and the ADA applies

Question 12

Electronic funds transfers' requirements say that transfers that vary in amount must be communicated to the designated payee within _______________ before the scheduled transfer or may give the consumer the option of receiving notice only when a transfer falls outside a specified range of amounts.

Accepted Answer

A)  10 days 
B)  20 days 
C)  30 days 
D)  15 days

Question 13

Under Unauthorized transfers-12 CFR 205.6 prerequisites for consumer liability are all of the following EXCEPT:

Accepted Answer

A)  If an access device was used, it must have been an accepted access device 
B)  Institution must have provided a means of identifying the consumer to whom the device was issued (for example, by electronic means (PIN), photograph, or fingerprint) 
C)  Increased liability for the consumer 
D)  Institution must have provided the following in writing to the consumer • A summary of consumer's liability for unauthorized transfers • Telephone number and address of person or office to be notified • in case of unauthorized transfer • Institution's business days

Question 14

Generally, a financial institution is required to ascertain if securities certificates they have taken by pledge, transfer, or otherwise have been reported as missing, lost, counterfeit, or stolen. When is it NOT required to take such actions?

Accepted Answer

A)  When the securities certificate is received directly from the issuer or issuing agent at issuance. 
B)  When the bank officer personally knows the individual pledging the certificate. 
C)  When the securities certificate received as part of a transaction has a face value of $20,000 or less. 
D)  When the securities certificate is received directly from an insured delivery service.

Question 15

Initial privacy notice-12CFR332.4; 12CFR40.4; 12 CFR 216.4; 12 CFR 573.4 says that:

Accepted Answer

A)  A notice must be given to a consumer before the institution discloses any nonpublic personal information about the consumer to a nonaffiliated third party, unless the disclosure is on the exempt list 
B)  A notice is not required to be given to a consumer who is not a customer if the financial institution does not disclose any nonpublic personal information about the consumer to any nonaffiliated third party, other than as authorized by this regulation 
C)  Only one notice is required to be provided on joint accounts. Therefore only one notice need to be provided to consumer loan customers even if there is more than one borrower and even if there is a separate guarantor 
D)  All of these

Question 16

What information must be on the loan application registers for home loans on property located within the bank's metropolitan area?

Accepted Answer

A)  The county, census tract, and metropolitan area of the property 
B)  The address, census tract, and metropolitan area of the property 
C)  The county, address, and fair market value of the property 
D)  The name, address, and metropolitan area of the applicant

Question 17

In Processing and evaluating applications-12 CFR 202.6, protected income part is also under discussion. Which of the following considerations is NOT its part?

Accepted Answer

A)  Public assistance income may not consider whether an applicant's income is from a public assistance source 
B)  Public assistance income may consider as it relates to another pertinent element of creditworthiness 
C)  May consider length of time public assistance income will be received, whether the applicant will continue to qualify for the income, and whether the income can be garnished 
D)  Can discount or refuse to consider the following: Part-time income Annuities Pensions Retirement benefits Alimony, child support, and separate maintenance payments to the extent they are likely to be consistently made

Question 18

EFT provides consumers with limitations on liability for unauthorized electronic fund transfers. It includes the following types of funds transfers EXCEPT:

Accepted Answer

A)  Point-of-sale transfers 
B)  Automated teller machine (ATM) transfers 
C)  Transfers initiated by Fax 
D)  Withdrawals of funds, including merchant transactions where no electronic terminal is involved, if the customer's account is debited

Question 19

Robin Martin made an individual application to the bank for a car loan. She has just returned to work on a regular basis because she was a full-time homemaker until recently, when her last child entered school. The loan officer would like to ask her about her husband. Under what circumstances can the officer ask Robin about her husband?

Accepted Answer

A)  The creditor believes the spouse's signature will make the applicant more creditworthy. 
B)  The applicant is married. 
C)  The applicant resides in a community property state. 
D)  The applicant's credit reports indicate that the spouse is a better credit risk.

Question 20

ABC National Bank, an independent bank with $120 million in total assets located in a large urban area, is in the process of determining its option for its CRA evaluation. Which of the following options is NOT open to ABC Bank?

Accepted Answer

A)  The small bank performance standard 
B)  The lending, investment, and service tests 
C)  The community development test 
D)  The strategic plan option

Exam 1: Certified Regulatory Compliance Manager