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ABA CRCM Practice Test - Questions Answers, Page 11

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List of questions

Question 101

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During a recent compliance examination, regulatory examiners found that the bank was not conducting flood hazard area determinations before closing on construction loans. The compliance professional

Question 102

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During a recent compliance examination, regulators cited the bank for violations of various marketing regulations. How should the compliance professional FIRST respond?

Question 103

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When developing a training plan for commercial lenders, which of the following regulations is least important to include?

Question 104

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A compliance professional is a member of the task force studying how the bank can reduce customer complaints about holding deposits. One proposed solution involves purchasing an expensive system tha

Question 105

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

Question 106

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First National Bank is a member of a multibank holding company. The bank makes ARM loans and occasionally purchases ARM loans from its affiliate national and state banks as well as from nonaffiliate

Question 107

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On which of the following adjustable-rate loans must the bank use an index beyond its control?

Question 108

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ABC National Bank regularly purchases mortgage loans from ACME Mortgage Company, a local mortgage broker. ACME places a mandatory arbitration clause in each of its mortgage documents. ACME believes

Question 109

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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?

Question 110

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Second State Bank offers a mortgage product that involves simultaneous second lien loans. These include a first lien for up to 90 percent of the purchase price and a second loan for the down payment

Related questions

Which of the following customers may be exempted under Phase II of the Bank Secrecy Act?

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?

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?

Banks must establish and maintain effective risk management and control processes over its DCCs and DSAs, including:

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?

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?

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:

What insurance disclosures are required in the lease disclosure statement?

The compliance program should address plans to verify adherence to applicable regulations through:

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?

Question 101

During a recent compliance examination, regulatory examiners found that the bank was not conducting flood hazard area determinations before closing on construction loans. The compliance professional has reviewed the files and agreed with the examiners' finding. What should be done FIRST?

Review the bank's flood policies and procedures to determine where the compliance failure occurred

Conduct a risk assessment of the flood determination requirement on construction loans

Prepare an analysis for bank management explaining the requirement

Review all construction loan files to determine the extent of the problem

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Question 102

During a recent compliance examination, regulators cited the bank for violations of various marketing regulations. How should the compliance professional FIRST respond?

Contact the bank's marketing manager to discuss the finding

Develop a policy requiring that all marketing materials be reviewed and approved by compliance before being published

Set up a training class for the marketing department

Review the marketing materials and applicable regulations to verify the finding.

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Question 103

When developing a training plan for commercial lenders, which of the following regulations is least important to include?

Equal Credit Opportunity, FRS Regulation B

Home Mortgage Disclosure, FRS Regulation C

Loans to Executive Officers, Directors, and Principal Shareholders of Member Banks, FRS Regulation O

Truth in Lending Act, FRS Regulation Z

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Question 104

A compliance professional is a member of the task force studying how the bank can reduce customer complaints about holding deposits. One proposed solution involves purchasing an expensive system that will reduce the number of holds placed by evaluating the customer's history and relationship with the bank. Which of the following roles is MOST important for the compliance professional on the task force?

Developing training for tellers who will use the new system

Setting parameters for what the system should review to determine the strength of the customer relationship

Validating the system to ensure it complies with regulatory restrictions

Conducting a cost-benefit analysis to determine if the system is the best solution

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Question 105

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

A loan to purchase a single-family dwelling to be used as a residence, secured by the dwelling with an adjustable interest rate

A loan made to purchase a mobile home to be used as rental property, secured by the home with a variable interest rate

A loan made to purchase an eight-unit apartment complex, secured by the building, made payable on demand with a variable rate of interest

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

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Question 106

First National Bank is a member of a multibank holding company. The bank makes ARM loans and occasionally purchases ARM loans from its affiliate national and state banks as well as from nonaffiliate banks. Which of the following practices is NOT acceptable under the OCC ARM regulation?

The bank purchases loans from its state affiliate banks where the index on the loan is tied to First National's prime rate.

The bank makes loans to purchase single-family dwellings with interest rates that may be adjusted from time to time.

The bank links the interest rate indices on its own ARM loans to them national prime rate as published in The Wall Street Journal.

The bank requires its national bank affiliates to use the national prime rate as published in The Wall Street Journal as the index for any of the ARM loans it purchases.

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Question 107

On which of the following adjustable-rate loans must the bank use an index beyond its control?

A loan to purchase a home to refurnish and resell for a profit

A loan to purchase a vacation home

A loan to purchase a duplex where the borrower will live in one of the units

A loan to purchase a home to be used as rental property

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Question 108

ABC National Bank regularly purchases mortgage loans from ACME Mortgage Company, a local mortgage broker. ACME places a mandatory arbitration clause in each of its mortgage documents. ACME believes this clause is necessary because of state laws governing arbitration. Is this clause a problem for ABC National?

No, unless other predatory or abusive lending practices are evident in the loans sold by ACME.

Yes, the clause is a sign of an abusive lender, and the bank should not purchase the loans.

Yes, the bank should make ACME strike the clause from future loans.

No, this is a common practice and the bank can ignore it.

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Question 109

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?

Establish policies on the bank's relationship with third-party brokers and originators

Review loan documentation

Audit the third-party broker

Require the broker to establish a reserve account for legal contingencies

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Question 110

Second State Bank offers a mortgage product that involves simultaneous second lien loans. These include a first lien for up to 90 percent of the purchase price and a second loan for the down payment, secured by a second lien on the property. The bank would like to be in full compliance with the Interagency Guidance on Nontraditional Mortgage Product Risks. Which of the following should Second State Bank incorporate into its loan program?

Risk management procedures to measure the risk of all simultaneous second lien loans and report results to management

A 100 percent loan loss reserve on all simultaneous second lien loans

A product combining simultaneous second lien loans with negative amortization features made to nonowner occupied borrowers

A prepayment penalty on all simultaneous second lien loans

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Total 463 questions

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