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ABA CRCM Practice Test - Questions Answers, Page 13

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List of questions

Question 121

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Records regarding compliance with Regulation M must be kept for how long?

Question 122

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Which of the following statements is true regarding the lessee's ability to purchase the leased property?

Question 123

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With regard to standards for wear and use of leased property, which of the following statements is true?

Question 124

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In evaluating the coverage of a bank's Regulation U compliance for loans to purchase or carry margin stocks, which of the following securities is NOT covered in the regulatory definition of 'margin

Question 125

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For purposes of insider lending laws and regulations, what is the definition of the term executive officer?

Question 126

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When may a bank pay an overdraft of $5,000 created by an executive officer of the bank?

Question 127

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How may a bank limit the definition of executive officer?

Question 128

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First National Bank has an employee benefit program whereby all bank employees who meet the bank's credit underwriting standards may obtain consumer loans for major purchases or expenses at a rate t

Question 129

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Which of the following is true regarding extensions of credit to executive officers, directors, and principal shareholders?

Question 130

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What is the longest time after board approval that a bank can approve a line of credit for an executive officer?

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 121

Records regarding compliance with Regulation M must be kept for how long?

Five years following consummation of the lease

Two years after the disclosures are made

Twenty-five months from consummation

One year from the time the disclosures are made

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Question 122

Which of the following statements is true regarding the lessee's ability to purchase the leased property?

The lessor must allow the lessee to purchase the leased property either during the lease term or at the end of the term.

If the lessor allows the lessee to purchase the property at the end of the lease term, the lessor may not charge more than the equivalent of 12 monthly payments for the property.

If the lessor allows the lessee to purchase the property at the end of the lease term, the purchase price must be disclosed in the initial disclosure statement.

The purchase price of the leased property must be mutually agreed on by the lessor and the lessee.

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Question 123

With regard to standards for wear and use of leased property, which of the following statements is true?

A lessor must adhere to the manufacturer's standards for wear and use of the leased property.

A lessor must develop and disclose its own standards for wear and use of leased property.

A lessor must provide a notice of wear and use standards on motor vehicle leases.

A lessor need not provide a notice of wear and use standards on motor vehicle leases if the lessor imposes an automatic, standardized charge.

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In evaluating the coverage of a bank's Regulation U compliance for loans to purchase or carry margin stocks, which of the following securities is NOT covered in the regulatory definition of 'margin stock'?

Any OTC stock

A security issued by an investment company that is licensed under the Small Business Administration Act

A warrant or right to subscribe to, or purchase, a margin stock

An equity security registered, or having unlisted trading privileges, on a national exchange

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Question 125

For purposes of insider lending laws and regulations, what is the definition of the term executive officer?

All bank officers at or above the level of executive vice president

Anyone who has the authority to participate in major policymaking functions at the bank NOTES

Anyone who has the authority to participate in lending decisions at the bank

All bank officers at or above the level of assistant vice president

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Question 126

When may a bank pay an overdraft of $5,000 created by an executive officer of the bank?

When the officer is at the level of a vice president or lower.

When the officer has previously signed an overdraft protection credit agreement in an amount sufficient to cover the overdraft.

When the officer has enough funds in another account to cover the overdraft.

When the bank pays the overdrafts for other good customers in the ordinary course of business.

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Question 127

How may a bank limit the definition of executive officer?

By strictly defining, in writing, the duties and responsibilities of the officers to be excluded from the definition

By passing a board of directors resolution setting forth the bank's definition of an executive officer

By requiring that those officers to be excluded from the definition not attend loan committee meetings or loan review meetings

By limiting the amount of confidential information given to those officers to be excluded from the definition

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Question 128

First National Bank has an employee benefit program whereby all bank employees who meet the bank's credit underwriting standards may obtain consumer loans for major purchases or expenses at a rate that is less than the bank's prime rate. Can the bank allow its executive officers to borrow under this program?

No. Executive officers may not have preferential interest rates under any circumstances.

No. However, the related interests of the executive officers may take advantage of it.

Yes. However, executive officers must secure their loans with collateral valued at 100 percent of the loan balance or more.

Yes. Provided the program is available to everyone at the bank as an employee benefit, executive officers may also participate.

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Question 129

Which of the following is true regarding extensions of credit to executive officers, directors, and principal shareholders?

Must be approved in advance by the board of directors if the aggregate credit is more than the greater of either $25,000 or 5 percent of the bank's capital and surplus, not exceeding $500,000

Must be approved in advance by the board of directors if the credit is greater than $50,000 or 5 percent of the bank's capital and surplus

May not exceed $100,000 in the aggregate, regardless of approvals

May not exceed $250,000 in the aggregate, regardless of approvals

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