CRCM Online Practice Questions and Answers

In a compliance program, tactical compliance procedures should be integrated into business line procedures, such as how to deliver an Adverse Action Notice when an application is declined. In this case:

A. Regulations should be applied consistently to procedures throughout the bank

B. Revisions to procedures should be based on compliance expertise and not mere editing

C. Providing solutions to mitigate any identified risk

D. Assisting business units in developing or revising policies and procedures to reflect current regulatory requirements

is frequent refinancing that do not benefit the borrower. This practice can result in borrower injury from the fees imposed and from the fact that it decreases home equity and increases the consumer's debt burden, thus increasing the chance of foreclosure.

A. Loan flipping

B. Loan refinancing

C. Securitization

D. Subprime loans

Government credit:

A. It is credit extended to governments or government agencies, instrumentalities, or subdivisions

B. It has no finance charge

C. It has Records retention requirements

D. Only the general rule against discrimination applies to government credit

On foreclosure, which of the following loans is subject to the reporting requirements for foreclosed and abandoned property?

A. A loan made to purchase a family car, secured by the car

B. An unsecured loan made to purchase a computer used in the borrower's business

C. A loan made to purchase a residence, secured by the residence

D. A loan made to purchase a home computer, secured by the computer

A bank has given a customer a merchandise gift with a fair market value of $25.00 for opening a deposit account. Which of the following statements describes the proper reporting status of this gift?

A. If the cost of the gift is under $20.00, it is not reportable to the IRS.

B. The cost of the gift is credited to the customer's account as a bonus, increasing the account balance.

C. The fair market value of the gift is reported to the customer on the periodic statement.

D. The fair market value of the gift is added to the interest paid and reported on Form 1099-INT.

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?

A. Neither, both are low-quality assets

B. Loan A only

C. Loan B only

D. Both Loan A and Loan B

Under the Interagency Statement on Retail Sales of Nondeposit Investment Products what disclosure must the bank's investment sales representative make to the customer?

A. The bank's regulatory agency

B. The sales commission resulting from the investment purchase

C. That the investment product is not guaranteed by the bank

D. The arbitration procedure for resolving disputes over investment advice

governs the collection of checks and other cash and noncash items and the handling of returned checks by Federal Reserve Banks. It also covers the rules governing funds transfers sent through the Fedwire. Its purpose is to provide rules for collecting and returning items and settling balances.

A. Regulation Z

B. Regulation X

C. Regulation J

D. None of the above

In Sender's agreement-12 CFR 210.28 it is clearly mentioned that:

A. Reserve Banks have the right to debit payment amounts from accounts of senders with the Reserve Bank

B. Senders have the right to create overdrafts in their accounts at the Reserve Bank; any overdraft is due and payable, without demand, at the end of the funds transfer day, when the Reserve Bank deems itself to be insecure, or at the time the sender suspends payments or is closed, whichever is earlier

C. Sender gives the Reserve Bank a security interest in all of sender's assets that are in the possession of the Reserve Bank to secure any obligations to the Reserve Bank, including an overdraft

D. Senders have 25 calendar days after receiving notice of a payment order to notify a Reserve Bank of an erroneously executed or unauthorized payment order

First National Bank owns a data processing company that sells financially related data processing services to various businesses in the community. Daniel Tyler, a loan officer, is negotiating a loan to a local CPA firm. He would like to make the loan conditional on the CPA firm's use of the subsidiary data processing firm.

May he do so?

A. Yes, because it is not a bank service.

B. Yes, because it is not related to pricing.

C. No. It is an illegal tie-in.

D. No, unless the company was planning to obtain a new data processing service provider anyway.