The OCC has determined that a national bank may not assume that, simply because a consumer's PIN or ATM card was used in a transaction, that transaction is authorized. Banks are required to take reasonable steps to determine whether the transaction was authorized. Such steps might include the bank's review of:

Documentation or written, signed statements provided by the consumer

Historical information on the customer's pattern of use (such as time, location, types of transactions, and so on)

Documentation or written, signed statements provided by the consumer

Historical information on the customer's pattern of use (such as time, location, types of transactions, and so on)

Problems reported by regular customers regarding the access device or ATM

To stop a payment of a preauthorized transfer, consumer must notify the institution or in writing at least:

Three days before the transfer is to occur

Binding after 14 days if no written confirmation is received

As an alternative to providing a periodic statement, a financial institution holding payroll card accounts may make available:

The account balance, accessed through a readily available telephone line

An electronic history of the account that covers a period of at least 60 days preceding the time the consumer electronically accesses the account

The account balance, accessed through a readily available telephone line

An electronic history of the account that covers a period of at least 60 days preceding the time the consumer electronically accesses the account

A written history of account transactions, available on request that covers a period of at least 15 days preceding the date of the consumer request

A written history of account transactions, available on request that covers a period of at least 30 days preceding the date of the consumer request

As an alternative to providing a periodic statement, a financial institution holding payroll card accounts may make available:

The account balance, accessed through a readily available telephone line

An electronic history of the account that covers a period of at least 60 days preceding the time the consumer electronically accesses the account

The account balance, accessed through a readily available telephone line

An electronic history of the account that covers a period of at least 60 days preceding the time the consumer electronically accesses the account

A written history of account transactions, available on request that covers a period of at least 15 days preceding the date of the consumer request

A written history of account transactions, available on request that covers a period of at least 30 days preceding the date of the consumer request

Consumers are not considered to be the customers if they do not have continuing relationship with the financial institution. A relationship is considered NOT to be a continuing relationship if:

The consumer obtains financial services only in isolated transactions, such as using an ATM

The consumer purchases airline tickets or travel insurance in an isolated transaction

The consumer obtains financial services only in isolated transactions, such as using an ATM

The consumer's loan is sold and servicing rights are retained

The consumer purchases airline tickets or travel insurance in an isolated transaction

The consumer is a beneficiary or grantor of a trust not administrated by the bank

Non public personal information under Regulation P includes:

Personally unidentifiable financial information

Any list or grouping of consumers that us derived using personally identifiable financial information that is not publicly available

Federal state and local government records

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

That the information is of the type that is available to the public

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

That it includes Federal, state and local government records

That the information is of the type that is available to the public

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

That a list of names, addresses of consumers of an organization that is not a financial institution

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

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

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

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

Annual privacy notices are not required to be given to former customers, including cases where:

A customer pays a load in full or institution charges off the loan

The institution no longer provides any open-end statements or notices to the customer

A customer pays a load in full or institution charges off the loan

The institution no longer provides any open-end statements or notices to the customer

A financial institution may provide a customer with a short form initial notice at the same time as it delivers an opt-notice. The short form notice must:

State that a privacy notice is available on request

Explain a reasonable means by which the consumer may obtain that notice Reasonable

State that a privacy notice is available on request

Explain a reasonable means by which the consumer may obtain that notice Reasonable

May be disclosed to the affiliates

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?

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.

First National Bank must confirm it if it previously agreed to do so.

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.

First National Bank may do nothing but return the letter of credit to the issuing bank and report to the IRS.

First National Bank must confirm the letter of credit but should also report it to the Department of Commerce.

Issuing Bank, a foreign bank, maintains an account with First National Bank, a U.S. bank. Issuing Bank issues a letter of credit in favor of ABC, InC. , a U.S. corporation. The letter of credit contains a boycott provision. The letter of credit provides that any negotiating bank may obtain reimbursement from Issuing Bank's account at First National Bank by certifying that the conditions of the letter of credit have been met. Issuing Bank does not send First National Bank a copy of the letter of credit. May First National Bank reimburse negotiating banks for the letter of credit when it contains a boycott provision?

Yes. First National Bank did not know of it, so it may reimburse a negotiating bank.

No. First National Bank is under a duty to determine the underlying conditions of any letter of credit it pays.

No. First National Bank should request a copy of the letter of credit at the time of its payment and then refuse to pay once it is aware of the provision.

Yes, provided ABC Company is not a participant in the boycott.

First National Bank opened a letter of credit in favor of ABC Co., a U.S. company, for ABC's sale of goods to Country X, a foreign country that participates in a boycott. The letter of credit contains no boycott provisions, but First National Bank knows that ABC Co. has agreed to supply a certification to Country X that ABC has not dealt with any blacklisted firms as a condition of receiving the letter of credit in its favor. What should First National Bank do?

Not implement the letter of credit

Implement the letter of credit because there is no boycott language on its face

Require ABC to indemnify the bank against any potential loss for participation in a boycott

Not implement the letter of credit

Have the letter of credit confirmed by a bank in Country X

First National Bank, a U.S. bank, is contacted by Manufacturing Company, InC. , a U.S. company, to finance its transaction with Country Z, a boycotting country. Payment will be made through a letter of credit in favor of Manufacturing Company at its U.S. address. First National Bank knows that the letter of credit will contain restrictive boycott conditions that would prevent the bank from implementing it. First National Bank suggests to Manufacturing Company, InC. , that it set up a shell corporation in Country Y, a nonboycotting country, and have the shell corporation be the beneficiary of the letter of credit. Does First National Bank have any problem with this transaction?

Yes. The transaction is set up to evade the regulation and First National Bank is liable.

No. The transaction is now not subject to Department of Commerce regulations because the beneficiary is not a U.S. company.

Yes. The transaction is set up to evade the regulation and First National Bank is liable.

No. The transaction is set up to evade the regulation, but First National Bank is not liable because Manufacturing Company, InC. , actually effected the transaction.

No. First National should have Manufacturing Company, InC. , sign a statement accepting full responsibility for the establishment of the shell corporation.

First National Bank advises Country A, a boycotting country, on various U.S. investments. Country A instructs First National Bank not to recommend for investment any shares of certain blacklisted companies. First National Bank follows this instruction. Has First National Bank participated or cooperated in an international boycott under the IRS regulations by this action?

No. The bank may agree not to recommend certain companies.

Yes. The companies are the subject of a boycott.

No. The bank may agree not to recommend certain companies.

Yes, if the companies are part of a boycott.

No, but the bank must report this action to the IRS.

ABC Co. signed a contract to export goods to Country M, a boycotting country. Payment will be made by a letter of credit confirmed by First National Bank. The letter of credit requires ABC Co. to certify that none of its directors are nationals of any country boycotted by Country M before ABC can be paiD. First National Bank confirms the letter of credit to ABC after determining that all of the documents are in order. Did First National Bank participate in a boycott, and must the bank report the action to the IRS?

Yes. The action was participation in a boycott and the bank must report the action to the IRS.

No. The bank's action was only ministerial.

Yes. The action was participation in a boycott and the bank must report the action to the IRS.

No. Only ABC Co. is required to report to the IRS.

Yes, but no reporting requirements were triggereD.

ABC Co. signs a contract to export goods to Country G, a boycotting country. Payment will be made by a letter of credit confirmed by First National Bank. The letter of credit requires the goods to be shipped on a ship eligible to enter the port of Country G in conformity with its laws and regulations and that the insurer of the goods has an agent in Country G. Country G's laws prohibit blacklisted ships from calling at its ports and blacklisted insurance companies from qualifying agents in Country G. First National Bank confirms the letter of credit. Did the bank's action constitute an agreement to participate in or cooperate with an international boycott, and is it subject to IRS reporting requirements?

Yes. The action is an agreement to cooperate with or participate in a boycott and, yes, it is subject to the reporting requirements.

Yes. The action is an agreement to participate in a boycott but no, it is not subject to the reporting requirements.

No. Because the bank is not responsible for knowing the laws of Country G, it is not in participation with or in cooperation with a boycott.

No. The confirmation of a letter of credit is not sufficient to be in participation or cooperation with a boycott.

Which of the following businesses would be eligible to be an exempt person under the requirements of the Bank Secrecy Act?

Goldsmith Aircraft Distributors

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?

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.

Because the restaurant is an established depositor, the bank should provide an unlimited exemption for cash deposits and withdrawals.

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.

The bank should ask the company if it qualifies as a listed business.

The bank should perform a corporate records check to determine if the company is chartered in the United States.

First National Bank is attempting to determine which of the following customers would qualify as exempt persons:* Nationwide Foods, Inc , is a national company with stock listed on the New York Stock Exchange* National Paper Products, is a wholly owned subsidiary of Nationwide Foods, Inc* Products Incorporated, a depositor for three months, is a regional company whose stock is designated a NASDAQ Capital Markets Company and that sells and leases large boats* Century Enterprises, a local company owning several local restaurants, is a longtime bank customer and frequently makes deposits in excess of $10,000. All of Century's stock is owned by a local family. Which of these customers would qualify as an exempt person?

All except for Products Incorporated

All except for Nationwide Foods, Inc

All except for National Paper Products

All except for Century Enterprises

All except for Products Incorporated

James Walker DBA Walker Enterprises has been a customer of the bank for one month. The company told the bank that it would regularly make deposits in excess of $10,000 because it operates several laundromats in the city. The bank performed a background check on the company before opening the account. For its first 30 days, the company made 12 large cash deposits. Can the bank exempt this company now? Why or why not?

Yes. The bank conducted due diligence on the customer to determine that it had legitimate large cash transactions.

No. It is a not a corporation, but a sole proprietorship.

No. It has not maintained an account at the bank for 12 months.

No. It operates an ineligible business.

Yes. The bank conducted due diligence on the customer to determine that it had legitimate large cash transactions.

Mrs. Evans, a customer of First National Bank, deposits $15,000 in cash to her account. During the transaction, Mrs. Evans explains that she received the money in the mail from her sister in Europe. What responsibility does the bank have?

Complete a CTR and encourage Mrs. Evans to file a CMIR

Complete a Currency Transaction Report (CTR)

Complete a United States Customs form 4790 (CMIR)

Complete both a currency transaction report and a CMIR

Complete a CTR and encourage Mrs. Evans to file a CMIR

The manager of Main Street branch calls and relates the following information: John Smith purchased a cashier's check for $1,000 cash at 10:00 A . m. on Tuesday. At 11:30 A . m. Mr. Smith returned and purchased a cashier's check for $2,500 cash and deposited traveler's checks totaling $9,000 into his checking account. At 4:00 p.m. Mr. Smith returned and deposited $8,000 cash into his checking account. This deposit was after normal banking hours, so it was recorded as of Wednesday's business date. What action should the bank take?

Record the $1,000 and $2,500 transactions on the bank's monetary instrument sales log because the total exceeds the $3,000 threshold

None, because no single cash transaction exceeded $10,000

File a Currency Transaction Report (CTR) for $11,500

Record the $1,000, $2,500, and $9,000 transactions on the bank's monetary instrument sales log because the total exceeds the $3,000 threshold

Record the $1,000 and $2,500 transactions on the bank's monetary instrument sales log because the total exceeds the $3,000 threshold

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

All amounts of currency deposited or withdrawn

Mammoth Enterprises is a new customer to the bank. It is a wholly owned subsidiary of Mammoth Corporation. Which of the following statements, if true, would make Mammoth Enterprises an exempt customer at the bank?

Mammoth Corporation is a U.S. corporation trading on the American Stock Exchange.

Mammoth Corporation is a London corporation, trading on the London Stock Exchange.

Mammoth Corporation is a U.S. corporation with unlisted stock.

Mammoth Corporation is a U.S. corporation trading on the American Stock Exchange.

Mammoth Enterprises is a U.S. corporation primarily in the investment banking business.

In April Lillian Redmond, the teller supervisor for First National Bank, discovers five counterfeit $20 bills in several teller drawers. In May and in June she discovers two additional counterfeit $20 bills. She has no knowledge of criminal activity on the part of any of the bank's employees or customers. She does not suspect any particular person in this transaction. Which of the following statements is true?

Ms. Redmond need not file a SAR on this incident because the total amount is less than $25,000.

Ms. Redmond must report the counterfeit funds on a SAR and must name the most likely individual(s) on the report.

Ms. Redmond must report the counterfeit funds on a SAR but is not required to name any individual(s) on the report.

Ms. Redmond need not file a SAR on this incident because the total amount is less than $25,000.

Ms. Redmond need not report this incident on a SAR because each incident is less than $5,000.

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?

Report the account activity as suspicious account activity and recommend that a SAR be filed

Complete a CTR for each of the cash activities at the branch office

Make no report of the activities because the transactions were not discovered until after the 15-day reporting deadline

Report the account activity to senior management for further review

Report the account activity as suspicious account activity and recommend that a SAR be filed

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

ABA CRCM Practice Test 6 - Free Online Exam Questions 201-240

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