A compliance officer receives a call from a loan officer who asks for advice 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

Quizplus · Accepted Answer

The compliance officer should advise the loan officer to contact the Securities Information Center (SIC) to determine if the certificate has been reported as lost, counterfeit, or stolen. This is because banks have a responsibility to ensure that they are not accepting collateral that has been fraudulently obtained or reported missing. Once the status of the certificate has been confirmed, the loan officer can then decide how to proceed with retaining the original or providing a copy in the loan file.

A Compliance Officer Receives a Call from a Loan Officer