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ABA CRCM Practice Test - Questions Answers, Page 2

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Question 11

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Which of the following credit arrangements would most likely be considered a purpose credit because it is indirectly secured by margin stock?

A loan made to purchase margin stock secured by nonmargin stock
A loan made to purchase margin stock secured by nonmargin stock
A loan made to a company for various corporate purposes, including the purchase of margin stock, secured by the corporate assets, which from time to time include margin stock; on the date of the consummation of the transaction approximately 10 percent of the assets of the company are margin stock
A loan made to a company for various corporate purposes, including the purchase of margin stock, secured by the corporate assets, which from time to time include margin stock; on the date of the consummation of the transaction approximately 10 percent of the assets of the company are margin stock
A loan made to purchase margin stock, guaranteed by an individual who has pledged margin stock as security for the guarantee
A loan made to purchase margin stock, guaranteed by an individual who has pledged margin stock as security for the guarantee
Bank is the trustee for a qualified pension plan from which the participants may borrow and use their interest in the plan as security; a participant borrows money for the purpose of purchasing margin stock
Bank is the trustee for a qualified pension plan from which the participants may borrow and use their interest in the plan as security; a participant borrows money for the purpose of purchasing margin stock
Suggested answer: C
asked 16/09/2024
Karsten Seifert
34 questions

Question 12

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Under Regulation U, prior to extending credit secured by margin stock for more than $100,000, a national bank must obtain which of the following?

Certificate of value for the collateral
Certificate of value for the collateral
Written statement from the borrower as to the purpose of the loan
Written statement from the borrower as to the purpose of the loan
Written statement certifying the borrower's business address and daytime phone number
Written statement certifying the borrower's business address and daytime phone number
Notice from the borrower as to his willingness to provide additional margin stock as collateral
Notice from the borrower as to his willingness to provide additional margin stock as collateral
Suggested answer: B
asked 16/09/2024
- Paulo Fonseca
45 questions

Question 13

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This is a loan term or an arrangement that modifies a loan term under which a bank agrees to suspend all or part of a customer's loan obligation on the occurrence of a specified event. It May be a part of the loan itself or a separate agreement.Does not include a loan payment deferral arrangement where the borrower or the bank can unilaterally defer a payment.What is it?

Debt suspension agreement (DSA)
Debt suspension agreement (DSA)
Anti-dying
Anti-dying
Debt cancellation contract (DCC)
Debt cancellation contract (DCC)
ALLL
ALLL
Suggested answer: A
asked 16/09/2024
Mia Mattsson
51 questions

Question 14

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Under content of disclosures long term disclosures may include the following, as applicable EXCLUDING:

Notification that the product is optional
Notification that the product is optional
Explanation of debt-suspension agreement
Explanation of debt-suspension agreement
Lump-sum payment of fee with no refund
Lump-sum payment of fee with no refund
Refund of fee paid in lump sum
Refund of fee paid in lump sum
Suggested answer: D
asked 16/09/2024
Antonios Petropoulos
34 questions

Question 15

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

Appropriate recognition and financial reporting of income, expenses, assets, and liabilities
Appropriate recognition and financial reporting of income, expenses, assets, and liabilities
Appropriate treatment of losses associated with these products
Appropriate treatment of losses associated with these products
Assessment of the adequacy of its internal controls and risk mitigation activities
Assessment of the adequacy of its internal controls and risk mitigation activities
Before entering into a contract, the bank must obtain the customer's written affirmative election to enter into the contract and written acknowledgement of the receipt of the disclosures
Before entering into a contract, the bank must obtain the customer's written affirmative election to enter into the contract and written acknowledgement of the receipt of the disclosures
Suggested answer: A, B, C
asked 16/09/2024
Cristian Melo
42 questions

Question 16

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The Equal Credit Opportunity Act (ECOA) was enacted in 1974 to prevent discrimination in credit transactions. In 1975 the act was amended. Which of the following prohibited base/s are now included in it?

National origin
National origin
Exercise of rights under the Consumer Credit Protection Act
Exercise of rights under the Consumer Credit Protection Act
Receipt of public assistance income
Receipt of public assistance income
All of these
All of these
Suggested answer: D
asked 16/09/2024
Fernando Pereira dos Santos
44 questions

Question 17

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Securities credit covers credit subject to Section 7 of the Securities Exchange Act of 1934 or credit by a broker or dealer subject to regulation under the act. The following requirements of Regulation B do not apply EXCEPT:

Restrictions regarding information about a spouse or former spouse, marital status, or sex of the applicant
Restrictions regarding information about a spouse or former spouse, marital status, or sex of the applicant
It is not payable by agreement in more than four installments
It is not payable by agreement in more than four installments
Provisions relating to furnishing credit information
Provisions relating to furnishing credit information
Records retention requirements
Records retention requirements
Suggested answer: B
asked 16/09/2024
Vijayakumar Dhandapani
46 questions

Question 18

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Government credit:

It is credit extended to governments or government agencies, instrumentalities, or subdivisions
It is credit extended to governments or government agencies, instrumentalities, or subdivisions
It has no finance charge
It has no finance charge
It has Records retention requirements
It has Records retention requirements
Only the general rule against discrimination applies to government credit
Only the general rule against discrimination applies to government credit
Suggested answer: A, D
asked 16/09/2024
Zden Bohm Autocont a.s.
32 questions

Question 19

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An oral or written request for credit made in accordance with the creditor's procedures for the type of credit requested. Information entered into and retained by a computer system qualifies as a written application. It is called:

Credit Application
Credit Application
Credit completed application
Credit completed application
Initial credit approach
Initial credit approach
None of these
None of these
Suggested answer: A
asked 16/09/2024
Patricia Escobar
39 questions

Question 20

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Definition of completed application---12 CFR 202.2(f) is:

An application for which the bank has received all the information it regularly considers in evaluation, including credit reports, verifications, and so forth
An application for which the bank has received all the information it regularly considers in evaluation, including credit reports, verifications, and so forth
The creditor must be reasonably diligent in collecting information to complete the application (for example, ordering credit bureau reports)
The creditor must be reasonably diligent in collecting information to complete the application (for example, ordering credit bureau reports)
An inquiry becomes an application when the creditor evaluates information and decides to grant or decline the credit
An inquiry becomes an application when the creditor evaluates information and decides to grant or decline the credit
Requests for written preapprovals to be issued by the lender are considered applications
Requests for written preapprovals to be issued by the lender are considered applications
Suggested answer: A, B
asked 16/09/2024
Fai Malali
41 questions
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_____________requires that a statement of purpose be obtained from borrowers whose loans are to be greater than $100,000 and that will be secured by margin stock. Loans made for the purpose of purchasing margin stock are subject to additional limitations
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?