Bob Jones, president of ACME bank, has had a banking relationship with Linda O'Reilly, a local real estate agent for several years. Ms. O'Reilly keeps most of her deposit accounts with ACME and also has had several personal loans there. Over a three-month time period, Ms. O'Reilly consistently (two or three times a week) brings to the bank a series of money orders in amounts ranging from $7,000 to $15,000, made payable to her in denominations of $1,000, and asks the teller to take them and issue one cashier's check payable to her. After this activity has continued for three months, Mr. Jones notices the frequency of cashier's checks issued to Ms. O'Reilly on a management report. It catches his attention because he does not know why Ms. O'Reilly would need this number of cashier's checks. On inquiry, the head teller explains the weekly transactions. Which of the following statements best describes Mr. Jones's responsibility?

He should ask Ms. O'Reilly why she is conducting these transactions and then determine whether to file a SAR.

He should immediately file a SAR. There is no logical explanation for this activity.

He should immediately file a CTR. Ms. O'Reilly is trying to evade the BSA currency transaction.

He should ask Ms. O'Reilly why she is conducting these transactions and then determine whether to file a SAR.

He is not required to do anything. Mr. Jones is well acquainted with this customer, and it is not illegal to purchase cashier's checks.

Which of the following is an accurate statement according to the requirements of the customer identification program regulations?

The bank's CIP program must enable it to form a reasonable belief about the identity of the person

A bank must always require documentary verification of a customer's identification

A bank may waive any part of the CIP requirements if senior management approves the waiver and there is a good cause

A physical address or a post office box is acceptable for any new customer

The bank's CIP program must enable it to form a reasonable belief about the identity of the person

When conducting a records search pursuant to a FinCEN request, what must a bank search?

All accounts maintained within the previous 12 months and transaction records for 6 months

All customer records from the previous five years

All accounts maintained within the previous 12 months and transaction records for 6 months

Only records that can be electronically searched

Nothing; searches are voluntary

A bank is conducting due diligence for a foreign correspondent bank account. Which of the following is NOT required information?

Copies of the tax return of the correspondent bank

The identities of the correspondent bank's true ownership

Information on the government licenses of the correspondent bank

Copies of the tax return of the correspondent bank

Information on the products and services the correspondent bank offers

Which of the following transactions requires completion of FinCEN Form 104, a CTR?

Cashing of a $14,000 check for a customer

Deposit of checks totaling $12,000 to a checking account

Cash purchase of a cashier's check for $7,800

Cash withdrawal of $3,000 from a checking account

Cashing of a $14,000 check for a customer

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?

When the employee remains employed by the bank and the bank notifies its regulatory agency

When the employee files the form

When the bank does not have all the necessary information and notifies its regulatory agency

When the employee's status is reinstated within six months

When the employee remains employed by the bank and the bank notifies its regulatory agency

When is it possible for a bank to be exempted from compliance with some of the Government Securities Act custodial regulations?

When the bank has procedures in place to make sure it complies with the custodial regulations of its federal regulatory agency

When the bank maintains its securities in the ordinary course of business

When the bank has procedures in place to make sure it complies with the custodial regulations of its federal regulatory agency

When the bank does not hold itself out as a government securities broker or dealer

When the bank uses more than the normal standard of care when maintaining possession and control of securities

Under what circumstances will a G-FINW (a withdrawal as a government securities dealer) become effective in less than 60 days?

If the regulatory agency determines that a shorter time period would be appropriate

If the bank requests a shorter time period

If the regulatory agency determines that a shorter time period would be appropriate

If the bank ceases doing business as a securities dealer

If the bank has no employees that qualify as associated persons

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

Keeping possessory government securities in a vault with dual control access

Segregating government securities from bank assets

Keeping government securities free of liens, claims, and charges.

Issuing safekeeping receipts for securities

A bank that is a government securities broker accepts money from a customer for the purchase of securities on Monday and does not purchase the securities by the end of the day on Tuesday. Does the bank have any responsibilities under the Government Securities Act?

Yes. The bank must deposit the money in an account of the customer at the close of business on Tuesday.

No. The bank has fulfilled its responsibilities under the Act.

Yes. The bank must purchase the securities before the close of business on Wednesday.

Yes. The bank must deposit the money in an account of the customer at the close of business on Tuesday.

No. The bank has until the close of business on Wednesday to purchase the securities before being liable to the customer for failure to effect a purchase.

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?

A statement that the bank is a regulated government securities dealer

A statement that the funds are not insured by the FDIC

A list of the specific securities that are the subject of the agreement

A provision for substitution of securities if they can be substituted

A statement that the bank is a regulated government securities dealer

Transactions with which of the following government securities would NOT subject a bank to the registration requirements of the Government Securities Act?

Obligations of the Farm Credit System

In which of the following situations is the bank NOT required to report lost or stolen securities?

When securities with no CUSIP numbers were expected from another financial institution

When bonds were expected to be delivered in person from the local Federal Reserve Bank and were not received

When stock traded on the over-the-counter exchange (OTC) was expected to be received through the mail from a customer's broker

When securities with no CUSIP numbers were expected from another financial institution

When stock traded on the New York Stock Exchange (NYSE) was expected to be delivered by the issuer's agent

Jayne Logan, a loan officer at State National Bank, has recently recruited Mr. David Roberts as a new loan customer. She has known Mr. Roberts for 10 years and handled his lending transactions at another bank where she previously worked. As his first transaction with State National Bank, Mr. Roberts pledges stock that is traded on the NYSE. The stock is received directly from Mr. Roberts, who has his secretary personally deliver it to the bank. Is the bank required, in this instance, to send a lost or stolen securities inquiry regarding the stock? Why or why not?

Yes. Because Mr. Logan is a new customer to the bank, the inquiry must be sent.

No. Because Ms. Logan has known Mr. Roberts for more than five years, no inquiry must be sent.

Yes. Because Mr. Logan is a new customer to the bank, the inquiry must be sent.

No. Because Mr. Logan's secretary personally delivered the stock certificates, no inquiry must be sent.

Yes. All stock pledged against a loan that is traded on the NYSE must have an inquiry sent.

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?

When the securities certificate is received directly from the issuer or issuing agent at issuance.

When the bank officer personally knows the individual pledging the certificate.

When the securities certificate received as part of a transaction has a face value of $20,000 or less.

When the securities certificate is received directly from an insured delivery service.

How long after discovery does a bank have to report any lost or missing securities when criminal activity is suspected?

Never. Law enforcement must report

A compliance officer receives a call from a loan officer who asks for adv ice on what she should do with a stock certificate (1,437 shares of IBM) from a new loan customer who wants to pledge it in support of a loan that has been approved at your bank. What should the compliance officer tell her FIRST?

Contact the SIC to determine if the certificate was reported as lost, counterfeit, or stolen

Retain a copy of the certificate in the loan file

Retain the original certificate in the branch vault for the term of the loan

Record the certificate information and give the original back to the customer

Contact the SIC to determine if the certificate was reported as lost, counterfeit, or stolen

A recent audit revealed that the bank's personal trust division was failing to determine whether securities being accepted from new trust customers have been reported as lost or stolen. To address the root cause of this problem, what should the compliance officer do FIRST?

Review the policies and procedures for accepting securities in new personal trust relationships to ensure securities verification

Inquire with the SIC about all securities noted in the audit

Contact the bank's primary regulator to determine the best course of action

Retrain all personal trust administrators on the lost and stolen securities requirements

Review the policies and procedures for accepting securities in new personal trust relationships to ensure securities verification

On which of the following loans must a bank maintain records under the Bank Secrecy Act?

All loans exceeding $10,000, but not secured by real property

All loans exceeding $5,000 and secured by real property

All loans exceeding $5,000, but not secured by real property

All loans exceeding $10,000 and secured by real property

All loans exceeding $10,000, but not secured by real property

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?

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

File a CTR for the $6,000 cash deposit

Aggregate the transactions and retain information about the purchase of the cashier's check

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

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

Long-term deposit account relationship

State-issued photo identification (e.g., driver's license)

Photo identification card issued by a local government agency

ABA CRCM Practice Test 12 - Free Online Exam Prep & Questions

The BSA officer has just been notified by the chief operations officer that, due to a glitch in the bank's OFAC interdiction software, wires have been regularly transmitted to a bank on the SDN list. Based on the OFAC Enforcement Guidance, what should the BSA Officer do FIRST to attempt to mitigate any penalties?

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ABA CRCM Practice Test 12

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