Which of the following activities is NOT a permissible nonbanking activity?

Providing general courier services to the businesses around the bank office

Providing mortgage loan data processing services to mortgage companies

Acting as a broker for credit life insurance

First National Bankshares, Inc., a bank holding company, held substantially all of the voting stock of an equipment manufacturing corporation as collateral for a loan to the owner. On May 15 the borrower defaulted and on September 1, after proper notice was given, the bank foreclosed its security interest on the stock and exercised its rights to vote the stock at appropriate times. On December 31 the bank transferred the stock to a subsidiary corporation, FNB, Inc., to market the stock for sale more effectively. What is the longest time period that FNB, Inc., can possibly hold the stock?

Up to five years from September 1

Up to two years from September 1

Up to five years from September 1

Up to two years from December 31

Up to five years from December 31

Which of the following is NOT a factor considered by the Federal Reserve Board when it evaluates an application under Regulation Y?

The current nonbanking activities of the applicant

The financial strength of the applicant

The management strength of the applicant

The current nonbanking activities of the applicant

The effect of the transaction on competition

Which of the following is NOT a corporate practice required of bank holding companies?

Each bank subsidiary must file a notice with the Federal Reserve before offering a new product.

Each bank subsidiary must conduct its operations in a safe and sound manner.

Each bank subsidiary must be insured by the FDIC.

Each bank subsidiary must file a notice with the Federal Reserve before purchasing any of its own securities.

For which of the following business activities must a bank holding company obtain prior approval of the Federal Reserve Board?

Serving as a safe deposit company

Operating as a management consulting firm for financial institutions

Selling installment loan data processing

ACME national bank plans to acquire Smith Brothers insurance agency and make it an operating subsidiary of the bank. ACME is considered a well managed and adequately capitalized bank. What regulatory-related action must ACME take to obtain the agency?

Notify the OCC before completing the sale

Complete the sale of the agency and notify the OCC within 10 days

Complete the sale of the agency and notify the OCC within 30 days

No regulatory notice is required

Notify the OCC before completing the sale

First State Bank, a state nonmember institution, plans to purchase a company that would be a financial subsidiary of the bank. First State will send a notice to the FDIC of its proposed acquisition. Of the following factors, which one would NOT be relevant to the FDIC's consideration of the bank's acquisition?

Whether First State Bank is well capitalized

The impact of the acquisition on First State Bank's safety and soundness

A subsidiary of First National Bank can legally participate in all but one of the following businesses. In which business may the subsidiary NOT legally participate?

Providing financial planning advice

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

Closing its near-town neighborhood branch

Removing its ATM from the local grocery store

Opening a deposit-taking facility in a kiosk during a college fair for one weekend

Moving its central branch across the street

Closing its near-town neighborhood branch

In which of the following situations does a bank need to post a branch closing notice?

A bank closes a branch in a suburban neighborhood because business has not adequately developed there.

A bank closes a branch temporarily because of heavy hurricane damage.

A bank closes a branch in a suburban neighborhood because business has not adequately developed there.

A bank decides not to exercise its option to purchase a branch it has been temporarily running for the FDIC as a part of a purchase of a failed institution.

A bank closes a branch and moves it 850 feet down the street.

Second National has decided to close one of its less profitable neighborhood branches. Which of the following actions is NOT required of the bank under federal law?

Publish a notice of the closing in the local newspaper

Send a notice to its regulatory agency

Send notices to the branch customers

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?

Re-post the notice and wait an additional 90 days

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

Meet with the community group, explain their reasoning, and help the group find some alternative financial services

In which of the following cases is a branch closing notice required?

Bank E is closing its near-town facility because of its outmoded building and equipment. Bank E has commissioned a study from a local development center to determine if it is feasible to re-open its branch in the future.

Bank A decides to stop cashing checks for noncustomers at its neighborhood branch.

Bank B and Bank C merge. Each has a branch in the near-town neighborhood. The merged organization is closing the branch that was formerly Bank B and merging it into the branch that was formerly Bank C.

Bank D is closing its drive-through facilities in its near-town neighborhood branch, although its regular facility is remaining.

Bank E is closing its near-town facility because of its outmoded building and equipment. Bank E has commissioned a study from a local development center to determine if it is feasible to re-open its branch in the future.

A bank has a stand-alone ATM in a high crime are A . Due to concerns for the safety of individuals using the ATM, management decides to close it. According to branch closing policy statements issued by federal regulators, which of the following actions should the bank take?

No action is required because an ATM is not, by definition, a branch.

Post a notice at the ATM at least 30 days before the intended closing date.

Notify the bank's federal regulatory agency at least 90 days before the intended closing date.

Mail a notice to all customers at least 90 days before the intended closing date.

Which of the following must be included in a branch closing notice to a bank's regulatory agency?

Detailed statement of the reasons for the closing

Comments from customers who oppose the closing

Detailed statement of the reasons for the closing

Copy of the notice to be sent to affected customers

Copy of board minutes reflecting the decision to close

A bank is planning to sell eight branches. The compliance officer participates on a bank committee to oversee the process. What should be the compliance officer's PRIMARY concern?

That the branches are closed in accordance with bank policy

That the bank's revenues will not be affected severely

That the branches are closed in accordance with bank policy

That customers of the branches will continue to have access to banking services

That the bank's confidential information is returned to the main office

If a bank receives a request for financial disclosure, how may the bank fulfill this request?

Provide copies of the call reports covering the current and previous year

Provide a copy of its statement of condition covering the year immediately preceding the request

Provide a copy of its most recent, unaudited financial statement

Provide copies of its Uniform Bank Performance Reports for three consecutive years

Which of the following actions is acceptable under the financial reporting regulations?

Attaching a narrative explanation by management of the reasons for a cease and desist order as a part of the annual disclosure

Attaching a copy of the bank's last safety and soundness examination to the annual disclosure

Including a statement that indicates that the bank's regulatory agency has reviewed the financial information

Using an unaudited financial statement for the past two years as an annual disclosure statement

A bank may include all of the following in the narrative portion of its financial disclosure except for one. Which of these pieces of information CANNOT be disclosed?

An excerpt from the latest regulatory examination prepared by the bank's regulatory agency

Information relating to mergers and acquisitions

Information related to a regulatory enforcement action that currently applies to the bank

An excerpt from the latest regulatory examination prepared by the bank's regulatory agency

The bank's future plans for product development

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

A national newspaper's story on the correspondent bank's financial condition

A national rating agency's report on the correspondent bank

The correspondent bank's own call report

The correspondent bank's annual report to shareholders

A national newspaper's story on the correspondent bank's financial condition

Bank B is a correspondent of Bank A . Which of the following must be included in Bank A's calculation of credit exposure to Bank B?

Bank A's deposit account of $1 million in Bank B

A loan to Mr. Pierce from Bank A secured by Bank B common stock

Bank B's purchase of U.S. government T-Bills on behalf of Bank A under an overnight repurchase arrangement

Bank A's deposit account of $1 million in Bank B

A letter of credit issued by Bank B and pledged against the ACME Company's debt at Bank A

Which of the following is NOT a requirement of Regulation F?

Providing quarterly reports to the board of directors of compliance audit results

Writing and maintaining policies and procedures for managing exposure to correspondent banks

Monitoring the exposure to correspondent banks on a regular basis

Establishing internal limits on exposure to correspondents

Providing quarterly reports to the board of directors of compliance audit results

Which of the following loans is clearly NOT subject to the IRS mortgage interest reporting requirement?

A loan made to purchase a lot on a lake, secured by a certificate of deposit

A loan made to purchase securities, secured by rural acreage

A loan made to finance a college education, secured by a piece of commercial real estate

A loan made to purchase a lot on a lake, secured by a certificate of deposit

A loan made to purchase a residence, secured by the dwelling

Which of the following actions subjects a lender to mortgage interest reporting requirements?

The lender holds mortgage loans in the course of its trade or business.

The lender is a qualified FHA or VA lender.

The lender receives at least $500 in interest on a mortgage loan during a calendar year.

The lender offers unsecured home improvement loans.

If the lender is subject to the mortgage interest reporting requirement, which of the following actions is NOT required?

The lender must report the loan balance as of December 31 of the year preceding the year the report is filed.

The lender must file an information return with the IRS.

The lender must report the amount of interest and points on the information return.

The lender must report the loan balance as of December 31 of the year preceding the year the report is filed.

The lender must send a statement to the borrower.

Information reports must include which of the following details?

Name, address, and TIN of the borrower

Address of the property securing the mortgage

Fair market value of the property at the time of the loan

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?

$1,000 for Loan A and $2,000 for Loan B

$1,155 for Loan A and $2,000 for Loan B

$1,155 for Loan A and $2,100 for Loan B

$1,000 for Loan A and $2,000 for Loan B

$1,000 for Loan A and $2,100 for Loan B

First National Bank sold several of its mortgage loans to individual investors and now services the loans for the individuals. First National Bank collects more than $600 on most of these mortgages and deposits the money into the account of the investors. At the end of each year, First National Bank sends the investors a summary of transactions on the mortgages and a detailed breakdown of the principal and interest payments made. Who is responsible for filing the mortgage interest information returns?

First National Bank, because it collects the interest and has the information necessary to file the information return

The investors, because they own the loans and the money is collected for them

The investors, because they have the necessary information from the servicer

First National Bank, because it was the first owner of the loans

First National Bank, because it collects the interest and has the information necessary to file the information return

First National Bank does not have the TINs of several borrowers with mortgage loans. What should the bank do to fulfill the mortgage interest reporting regulations?

Include a request for TINs in the annual mailing of the payment coupon book

Mail a one-time request for TINs by certified mail to each borrower who has failed to provide one

Post a notice in its mortgage lending lobby that TINs are required for mortgage loans

Mail a separate request for TINs annually to borrowers who have failed to provide one

Include a request for TINs in the annual mailing of the payment coupon book

For a U.S. bank with domestic and foreign locations, which transaction does NOT require an information return to report the amount of interest paid?

A loan made to Smith and Withers, a partnership formed for the practice of law, located in the United States, payable at the bank's New York office, guaranteed by Mr. Smith and Mr. Withers, and secured by the law firm's office building

A loan made to James Roberts, a U.S. resident, payable at the bank's New York office, to purchase securities secured by the borrower's home in Mexico

A loan made to Robert and Louise LeBlanc, who are resident aliens, payable at the bank's New York office, secured by a piece of real property located in Canada

A loan made to Smith and Withers, a partnership formed for the practice of law, located in the United States, payable at the bank's New York office, guaranteed by Mr. Smith and Mr. Withers, and secured by the law firm's office building

A loan made by Mrs. West, a U.S. citizen, to purchase a mobile home and the lot on which it will be placed; both the mobile home and lot are located in the United States

By which date must an interest reporting statement be sent to the borrower's last known address?

January 31 of the year following the year the interest is paid

January 15 of the year following the year the interest is paid

January 31 of the year following the year the interest is paid

February 28 of the year following the year the interest is paid

March 1 of the year following the year the interest is paid

On foreclosure, which of the following loans is subject to the reporting requirements for foreclosed and abandoned property?

A loan made to purchase a residence, secured by the residence

A loan made to purchase a family car, secured by the car

An unsecured loan made to purchase a computer used in the borrower's business

A loan made to purchase a residence, secured by the residence

A loan made to purchase a home computer, secured by the computer

First National Bank has foreclosed on several loans. One of the loans is not subject to the requirement to submit an information return on the foreclosed property. Which loan is most likely NOT covered by the regulations?

A loan to Dr. Stevens to purchase kitchen appliances

A loan to Brown & Associates, a local law firm, to purchase furniture, secured by the furniture

A loan to Mrs. Lynch to purchase stereo equipment for use in her office waiting room

A loan to Dr. Stevens to purchase kitchen appliances

A loan to Mr. and Mrs. Sanders to purchase a computer for their antique shop

First National Bank made a loan to Lawrence & Co. for the purpose of purchasing landscape equipment, secured by a storage lot the company owneD. The borrower made payments for a year and then defaulteD. Three months passed without any communication or payments from the borrower, despite the bank's efforts to locate the company's owners. The company appears to have ceased operations. What is the bank's BEST course of action?

Make reasonable inquiries to determine whether the property is abandoned and if so, report it as abandoned

Do nothing, because the bank has no actual knowledge of abandonment and has not foreclosed on the property

Make reasonable inquiries to determine whether the property is abandoned and if so, report it as abandoned

Locate the borrower, foreclose on the property, and report the transaction as a foreclosure

Report the property as abandoned

Which of the following pieces of information is the bank NOT required to report on Form 1099 for foreclosed and abandoned property?

The name, address, and TIN of the borrowers

Whether the borrower is personally liable for the debt

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

January 31 of the year following the year of the foreclosure or abandonment

January 15 of the year following the year of the foreclosure or abandonment

January 31 of the year following the year of the foreclosure or abandonment

February 28 of the year following the year of the foreclosure or abandonment

March 1 of the year following the year of the foreclosure or abandonment

Which account is NOT subject to backup withholding?

A money market savings account owned by Brenda Wilson

A time deposit account owned by Bob and Nancy Dawson

A savings account owned by Karen Hitchings

Walter Johnson has two accounts at First National Bank. His savings account was opened in 1975, and his money market savings account was opened in 1985.He has never supplied a TIN number to the bank. What must First National Bank do?

Withhold 28 percent of the payments on each account and annually request a TIN on the savings account

Withhold 28 percent of the payments on each of the accounts

Withhold 28 percent of the payments on each account and annually request a TIN on the savings account

Annually request a TIN on both accounts

Refuse to open future accounts without a TIN

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; and3) 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?

Refund to Ms. Nelson and Mr. Whiteside because the interest was erroneously withheld

Refund the withheld interest to all payees

Refund to Ms. Nelson and Mr. Whiteside because the interest was erroneously withheld

Refund only to Mr. Whiteside because the interest was erroneously withheld

Refund only to Ms. Nelson because the interest was erroneously withheld

ABA CRCM Practice Test 8 - Free Online Exam Prep & Questions

Spam

Selling illegal goods, money scams etc.

Hate Speech

Serious attack on a group.

Harassment and bullying

Harassing an individual (including doxing)

Harmful activities

Threatening or glorifying violence or serious harm, including self-harm

Adult content (Consensual)

Nudity/Sexual content

Sexual exploitation and abuse (child safety)

Sexually explicit or suggestive imagery or writing involving minors

Sexual exploitation and abuse (adults and animals)

Sexually explicit or suggestive imagery or writing involving non-consenting adults or non-humans

Plagiarism

Reusing content without attribution (link and blockquotes)

Poorly written

Not in English or has very bad formatting, grammar, and spelling

Inappropriate credential

Author's credential is offensive, spam, or impersonation

Other

Ex. Illegal content, incomplete question...

ABA CRCM Practice Test 8

Question

ABA CRCM Practice Tests

Practice Tests