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ABA CRCM Practice Test - Questions Answers, Page 12

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List of questions

Question 111

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According to the 2007 interagency statement on subprime mortgage lending, what should an institution offering mortgage loans to subprime borrowers provide before submission of an application?

Question 112

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The senior lender at ABC bank would like to make stated income mortgage loans (i.e., loans where the bank does not verify the applicant's income) to mortgage customers, including subprime borrowers.

Question 113

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Under Regulation M, what is a ''consumer lease''?

Question 114

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Milton Edwards leased an automobile from First National Bank. The lease contained a provision whereby Milton would be liable for the automobile at the end of the lease based on its fair market value

Question 115

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When must disclosures on consumer leasing transactions subject to Regulation M be made?

Question 116

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A bank does not know all of the specific information to be disclosed on the lease at the time of the consummation. What may the bank do after attempting to obtain the information?

Question 117

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What insurance disclosures are required in the lease disclosure statement?

Question 118

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The initial disclosure requires that certain disclosures relating to the termination of a lease be given to the consumer. Which of these disclosures is NOT required?

Question 119

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Roberta Milton's car lease with First National Bank reached its termination on August 1. Roberta and the bank agreed to extend the lease on a month-tomonth basis without charging her a fee for doing

Question 120

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First National's consumer leasing department placed an ad in the local paper that pictured a car with the caption, ''Sign a lease with us and pay only $275 per month.'' What other information must t

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 111

According to the 2007 interagency statement on subprime mortgage lending, what should an institution offering mortgage loans to subprime borrowers provide before submission of an application?

Information on local residential real property values

Payment shock information

Truth in Lending disclosures

Initial escrow statements

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The senior lender at ABC bank would like to make stated income mortgage loans (i.e., loans where the bank does not verify the applicant's income) to mortgage customers, including subprime borrowers. Under the statement on subprime mortgage lending, which of the following is the best statement of the bank's responsibility regarding this new program?

Due to the risks, it should not implement such a program for subprime borrowers

The bank should make a policy for this program that includes mitigating factors for the risks

The bank should set stringent debt-to-income ratios for these loans

The bank should establish workout procedures for such loans in advance of making them.

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Question 113

Under Regulation M, what is a ''consumer lease''?

Any lease of $25,000

A consumer lease for $25,000 or less with an option to own the property after the lease expires

A consumer lease for $25,000 or less for the use of personal property

Any consumer or agricultural lease for $25,000 or less

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Question 114

Milton Edwards leased an automobile from First National Bank. The lease contained a provision whereby Milton would be liable for the automobile at the end of the lease based on its fair market value. At the end of the lease, the bank notified Milton that the value of the automobile, based on industry publications, was $10,500 and required him to pay that amount to obtain ownership of the property. Milton objected and requested that the car be individually appraised.What must the bank do?

Nothing; an estimate of the value based on industry standards is sufficient

Hire an independent appraiser to appraise the automobile (both parties agree to be bound by the appraisal)

Allow Milton to hire an independent appraiser to appraise the automobile (both parties agree to be bound by the appraisal)

Use the average of the car value as determined by a third party appraiser Milton hires with the original bank appraisal

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Question 115

When must disclosures on consumer leasing transactions subject to Regulation M be made?

At the time of the application

Before the consummation of the lease

Before the first payment due under the lease

Within 10 days after consummation of the lease

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Question 116

A bank does not know all of the specific information to be disclosed on the lease at the time of the consummation. What may the bank do after attempting to obtain the information?

Omit the unknown disclosures

Estimate the amounts and note that the information is estimated

Delay consummation of the transaction until the information is ascertained

Estimate the information based on averages of all other leasing transactions the bank has made within the last six months

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Question 117

What insurance disclosures are required in the lease disclosure statement?

The types and amounts of coverage provided by the lessor and the cost to the lessee

The types, amounts, and estimated costs of recommended coverage even if not provided or paid by the lessor

The cost to the lessee NOTES

No insurance disclosures are required

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Question 118

The initial disclosure requires that certain disclosures relating to the termination of a lease be given to the consumer. Which of these disclosures is NOT required?

The conditions under which the lease may be terminated before the end of its term

Whether or not the lessee has the option to purchase the property and at what price

Whether the lease may be extended at the option of the lessee

Whether the lessee will be liable for the difference between the estimated value of the property and its realized value at the termination or end of the lease

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Question 119

Roberta Milton's car lease with First National Bank reached its termination on August 1. Roberta and the bank agreed to extend the lease on a month-tomonth basis without charging her a fee for doing so. What disclosure responsibilities does the bank have now?

None are needed now.

None, until after six months of the month-to-month lease

The bank must make an entirely new initial disclosure

The bank must disclose the estimated residual value at the end of six months

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Question 120

First National's consumer leasing department placed an ad in the local paper that pictured a car with the caption, ''Sign a lease with us and pay only $275 per month.'' What other information must this ad have?

A statement that the transaction is not a loan

The total amount due at consummation or delivery, the number of payments required, and any required security deposit

The bank's policy regarding the purchase of the property by the lessee

Disclosures regarding required insurance

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Total 463 questions

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