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ABA CRCM Practice Test - Questions Answers, Page 34

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List of questions

Question 331

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Which of the following sets of policies or procedures is NOT a requirement of a security program?

Question 332

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According to federal regulations, what must a security officer do when establishing a bank security program?

Question 333

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First National Bank and Fidelity Bank are subsidiaries of Bank Holding Company, Inc. Fidelity is planning to sell First National two loan participations.It has been Fidelity's practice for several y

Question 334

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First National Bank is a wholly owned subsidiary of Bank Holding Company, Inc.Which of the following companies is NOT an affiliate of First National Bank?

Question 335

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First National Bank would like to make a loan to an affiliate bank. Which of the following would NOT be acceptable as collateral for such a loan?

Question 336

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Which of the following practices is authorized by the Federal Reserve Act?

Question 337

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First National Bank made a loan to a nonbank affiliate of its holding company that is secured by stocks, bonds, and debentures. At the outset of the loan,First National had collateral with a market

Question 338

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Which of the following items is considered a low-quality asset?

Question 339

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A member bank wants to sell assets to an affiliated bank that is 100 percent owned by the same bank holding company. Is this transaction allowed?

Question 340

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A national bank may make a loan to an affiliated mortgage company that is 100 percent owned by the same bank holding company, if the aggregate amount of all covered transactions of the national bank

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 331

Which of the following sets of policies or procedures is NOT a requirement of a security program?

Policies addressing what to do in case of a robbery

Procedures for opening the bank at the beginning of the day

Procedures for keeping customer information private

Policies addressing periodic reporting to the board of directors

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Question 332

According to federal regulations, what must a security officer do when establishing a bank security program?

Survey competitors' security procedures

Hire uniformed armed guards to monitor the bank lobby

Modify the cash vault to meet minimum wall thickness standards

Institute procedures for testing security devices periodically

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First National Bank and Fidelity Bank are subsidiaries of Bank Holding Company, Inc. Fidelity is planning to sell First National two loan participations.It has been Fidelity's practice for several years to sell overlines to First National.

* Loan A has been on Fidelity's books for two years. It is a line of credit that will be over Fidelity's loan limit with its next advance. It was recently classified as special mention during a safety and soundness examination. First National agreed to purchase overlines on Loan A before Fidelity's funding of the loan two years ago and signed a participation agreement at that time.

* Loan B is 60 days past due for a principal payment, although interest payments are current. The loan has been on the books at Fidelity for one year. First National agreed to purchase overlines on Loan B six months ago. Which, if any, of these loans can First National purchase?

Neither, both are low-quality assets

Loan A only

Loan B only

Both Loan A and Loan B

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Question 334

First National Bank is a wholly owned subsidiary of Bank Holding Company, Inc.Which of the following companies is NOT an affiliate of First National Bank?

A company that owns 60 percent of Bank Holding Company, Inc.

A company of which First National owns 100 percent of the stock, set up solely to hold the title to the First National Bank building

A company established to sell securities and that is 100 percent owned by Bank Holding Company, Inc.

Another bank that is owned by Bank Holding Company, Inc.

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Question 335

First National Bank would like to make a loan to an affiliate bank. Which of the following would NOT be acceptable as collateral for such a loan?

U.S. Treasury bills in an amount equal to the loan

Stock traded on the New York Stock Exchange that has a market value equal to 130 percent of the loan amount

An account for the benefit of First National held at the affiliate bank in an amount equal to the loan amount

Eligible bankers' acceptances with a market value equal to the loan amount 582 AMERICAN BANKERS ASSOCIATION

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Question 336

Which of the following practices is authorized by the Federal Reserve Act?

An agreement by a bank that it is responsible for the obligations of its subsidiary

A bank's purchase, in its fiduciary capacity, of the affiliate's assets if the fiduciary instrument allows for such a purchase

The sale of a nonaccruing loan from a bank to its bank affiliate

The acceptance of an affiliate's securities of an affiliate as collateral for a NOTES bank's loan from the bank to the affiliate

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Question 337

First National Bank made a loan to a nonbank affiliate of its holding company that is secured by stocks, bonds, and debentures. At the outset of the loan,First National had collateral with a market value equal to 150 percent of the loan amount. Over time, some of the collateral has been retired and amortized. Some has dropped in value. What is the responsibility of the bank regarding the collateral?

The bank has no responsibility once the loan is made provided the percentages were correct at the loan's inception.

The bank must check values every month to ensure that the percentages are correct at all times.

The bank must check values when the collateral is retired or amortized to make sure the collateral is replaced with securities that will bring the loan into compliance with the percentages required in the law.

The bank must annually check the value of the collateral to ensure that the percentage of value is maintained.

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Question 338

Which of the following items is considered a low-quality asset?

An asset in a nonaccrual status

An asset on which interest is past due 15 days

An asset that will be transferred to the workout area within the next 60 days so that the terms can be renegotiated

None of the above

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Question 339

A member bank wants to sell assets to an affiliated bank that is 100 percent owned by the same bank holding company. Is this transaction allowed?

No. It is prohibited.

Yes, but it is subject to an aggregate limit of 10 percent of the member bank's capital and unimpaired surplus.

Yes. It is permitted, if the assets are not low quality.

Yes, but it must be classified on the receiving bank's books as low quality assets.

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Question 340

A national bank may make a loan to an affiliated mortgage company that is 100 percent owned by the same bank holding company, if the aggregate amount of all covered transactions of the national bank and its subsidiaries does not exceed a certain percentage of capital and surplus of the national bank. What is that percentage?

10 percent

15 percent

20 percent

25 percent

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Total 463 questions

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