01. When helping a loan officer determine whether the bank must give a written adverse action notice to a business loan applicant, what should the compliance officer consider?
a) Current net income
b) Gross revenue for the preceding year
c) Length of time the applicant has been in business
d) Type of business entity (that is, corporation, partnership, or sole proprietorship)
02. A branch manager finds an unexplained $7,000 cash shortage in Teller #1's cash drawer. Which of the following actions must the bank take?
a) File a Currency Transaction Report (CTR) with the IRS
b) Discharge Teller #1 immediately
c) Send a notice of adverse action to the bank's federal regulator
d) File a Suspicious Activity Report (SAR)
03. _________ is a transfer that is authorized in advance to occur at substantially regular intervals. Payments that require the consumer to take specific actions to initiate them (such as by entering instructions on a touch-tone telephone or on the Internet) are not such type of EFTs.
a) A preauthorized EFT
b) A postauthorized EFT
c) A standard format EFT
d) A customized EFT
04. Compliance monitoring has revealed customers who are consistently writing more than six checks per month on their money market deposit account. To comply with Regulation D, which of the following actions should you advise the business take?
a) Advise customers to open a second money market account so they can write six checks per month on each account.
b) Notify the customers that writing more than six checks per month may result in account closure or conversion to a non-interest-bearing account.
c) Implement a service charge to penalize customers for each withdrawal that exceeds the maximum of three per month.
d) Allow customers to continue writing more than three checks per month, but prohibit pre-authorized transfers.
05. With regard to standards for wear and use of leased property, which of the following statements is true?
a) A lessor must adhere to the manufacturer's standards for wear and use of the leased property.
b) A lessor must develop and disclose its own standards for wear and use of leased property.
c) A lessor must provide a notice of wear and use standards on motor vehicle leases.
d) A lessor need not provide a notice of wear and use standards on motor vehicle leases if the lessor imposes an automatic, standardized charge.
06. A borrower has a right to rescind a loan agreement in all of the following situations except:
a) A line of credit used for the borrower's business, secured by the borrower's primary dwelling
b) A revolving line of credit secured by the borrower's primary dwelling used to improve the borrower's home
c) An increase of a line of credit from $5,000 to $10,000 secured by the borrower's primary dwelling
d) A loan to pay off a contract for a deed secured by the borrower's primary dwelling
07. The primary responsibility for managing a bank’s inherent compliance risk should lie with which of the following?
a) Internal audit
b) Consumers
c) The business
d) Compliance officer
08. What may a creditor do when furnishing credit information?
a) May designate accounts in any manner that is convenient and reasonable
b) Must designate accounts as specified by the parties
c) Must designate accounts to show all parties, including guarantors
d) Must designate accounts to show participation by both spouses if both are liable
09. Which of the following bases is the most acceptable method of delineating a bank's CRA assessment area(s)?
a) The bank's effective lending territory (i.e., where it makes a substantial portion of its loans)
b) Existing boundaries such as MSAs or counties in which the bank's office(s) is(are) located
c) The zip codes that are included within a radius of the bank's office(s)
d) The area(s) assigned by the bank's primary regulator
10. Unless excluded by a board resolution or the bylaws, the following officers will be considered to be executive officers EXCEPT:
a) Chairman of the board
b) President
c) Each vice-president and above (for example, senior vice-president, executive vice-president, and so on)
d) Brokerage house's vice president
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