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ABA CRCM Practice Test - Questions Answers, Page 6

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Question 51

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Compliance issues related to payday lending are all of the following EXCEPT:

Question 52

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Which of the following comes under the heading of nontraditional mortgage product risks?

Question 53

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In Guidance on Nontraditional Mortgage Product Risks, if the institution has a concentration in a nontraditional mortgage portfolio, the institution should:

Question 54

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If the institution offers both full and reduced documentation loans and there is a pricing premium attached to the reduced documentation loan, the consumer should:

Question 55

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Institutions that offer nontraditional mortgage products should make sure they comply with the following, as applicable, EXCEPT:

Question 56

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Underwriting standards in Subprime Mortgage Lending include:

Question 57

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Below mentioned is the necessary information that should be included in the___________. Risk of payment shock---potential payment increases; how the new payment will be calculated when the introduct

Question 58

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Supervisory review should also be the part of Subprime Mortgage Lending. It should review:

Question 59

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The act limited balloon payments in consumer leases and enabled consumers to compare lease terms with credit terms where appropriate. The act was implemented by Regulation M (Consumer Leasing). It r

Question 60

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Content of segregated disclosures in Consumer Leasing Act include all of the following EXCEPT:

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 51

Compliance issues related to payday lending are all of the following EXCEPT:

Payday lending may adversely affect a bank's CRA rating. Any illegal or questionable practices will negatively affect a bank's CRA performance. A payday lending program may be inconsistent with helping to meet the community's credit needs

The bank (or its third-party partner) must properly disclose all finance charges and fees to payday lending customers. Advertisements of the program are also subject to Truth-in-Lending requirements

Adverse action disclosures must be provided to applicants of payday loans that are denied if a consumer report (including check tracking services) was used in the credit decision

The bank may be subject to the FOC's unfair or deceptive practices rules.

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Question 52

Which of the following comes under the heading of nontraditional mortgage product risks?

Reduced documentation adds risk to a mortgage loan.Institutions may rely on reduced documentation in the credit underwriting process.Income and credit verification may not be obtained.Use of reduced documentation should be subject to clear policies that require more documentation when the credit risk rises

Perform due diligence before entering into third-party relationships, including a review of the third party's General competence Business practices and operations Reputation Financial capacity Internal controls Record of compliance with laws

Amounts credited as recovery on a loan must not exceed all principal, finance charges, and fees previously charged off. Amounts that exceed these must be credited as income

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Question 53

In Guidance on Nontraditional Mortgage Product Risks, if the institution has a concentration in a nontraditional mortgage portfolio, the institution should:

Have well-developed monitoring systems and risk management practices

Monitor by originator and key borrower and portfolio characteristics

Not understand the risk of payment shock and negative amortization

A and B

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Question 54

If the institution offers both full and reduced documentation loans and there is a pricing premium attached to the reduced documentation loan, the consumer should:

Be alerted to this fact

Not be alerted to this fact

Provide consumers with a clear statement of the options available

Not lead consumers with payment option ARMs to choose a non-amortizing or negatively amortizing payment

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Question 55

Institutions that offer nontraditional mortgage products should make sure they comply with the following, as applicable, EXCEPT:

Truth in Lending Act

FTC Act (i.e., Unfair and Deceptive Acts and Practices)

RESTA

State laws prohibiting deceptive trade practices

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Question 56

Underwriting standards in Subprime Mortgage Lending include:

The borrower's debt-to-income ratio should include the borrower's total yearly housing-related payments as a percentage of gross monthly income

Institutions should have a clear policy governing the use of risk-layering features, such as reduced documentation loans or simultaneous second lien mortgages

Stated income and reduced documentation loans to subprime borrowers should be made only if there are clear, documented mitigating factors

Mitigating factors should be present when risk layering features are combined in order to support the underwriting decision and the borrower's repayment capacity

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Question 57

Below mentioned is the necessary information that should be included in the___________. Risk of payment shock---potential payment increases; how the new payment will be calculated when the introductory rate expires Ramifications of prepayment penalties---how they will be calculated, when they will be imposed Ramifications of balloon payments Ramifications of the lack of escrowing for taxes and insurance---who is responsible for paying taxes and insurance and the fact that their costs may be substantial Cost of reduced documentation loans---whether there is a pricing premium required

Consumer protection principles

Underwriting standards

Workout arrangements

None of these

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Question 58

Supervisory review should also be the part of Subprime Mortgage Lending. It should review:

Regulatory agencies will continue to focus on risk management review and consumer compliance processes

Hiring and Training of personnel

Agencies will continue to take action against institutions that violate consumer protection laws or fair lending laws or that engages in unfair or deceptive acts or practices or in unsafe or unsound lending practices

Applicability of prepayment penalties

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Question 59

The act limited balloon payments in consumer leases and enabled consumers to compare lease terms with credit terms where appropriate. The act was implemented by Regulation M (Consumer Leasing). It requires disclosures to consumers before consummation of the lease agreement. This act is:

Consumer leasing act

Risk disclosure act

ALLL

None of these

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Question 60

Content of segregated disclosures in Consumer Leasing Act include all of the following

EXCEPT:

Amount due at lease signing or delivery, itemized by type and amount, including: efundable security deposit Advance monthly or other periodic payment Capitalized cost reduction An itemization of how the amount due will be paid, by type and amount (only required in a motor vehicle lease), using the model form

Number, amount, and due date of payments scheduled and the total amount of periodic payments

In an open-end lease, the descriptive statement ''You will owe an additional amount if the actual value of the vehicle is less than the residual value''

If there are multiple items of property, the property description may be separate

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Total 463 questions

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