Question 1

Practice/s addressed in the guidance of OCC advisory on credit card practices-AL-2004- 10 is/are:

Accepted Answer

The OCC advisory on credit card practices addresses issues related to "Up-to" marketing, promotional rate marketing, and repricing of accounts and other changes in credit terms, but not lending to insiders.

Question 2

OCC advisory on credit card practice-AL-2004-10 in credit card practices covers:

Accepted Answer

The OCC advisory on credit card practice covers marketing and account management practices that may be unfair or deceptive and expose a bank to compliance and reputation risk. Option A is almost correct, but it's incomplete since it doesn't specifically state that the credit card practices are related to marketing and account management. Option C is too broad, and option D is incorrect since the advisory is about identifying potentially unfair or deceptive practices that can put the bank at risk.

Question 3

Under Consumer Leasing Act Enforcement-15 USC 1667d section FIRREA penalties include:

Accepted Answer

The answer of Under Consumer Leasing Act Enforcement-15 USC 1667d...

Question 4

_____________ requires that a statement of purpose be obtained from borrowers whose loans are to be greater than $100,000 and that will be secured by margin stock. Loans made for the purpose of purchasing margin stock are subject to additional limitations

Accepted Answer

Regulation U requires a statement of purpose for loans over $100,000 that are secured by margin stock. It also imposes additional limitations on loans made for the purpose of purchasing margin stock. Regulation V pertains to Fair Credit Reporting, Regulation Z pertains to Truth in Lending, and Regulation X pertains to Real Estate Settlement Procedures.

Question 5

Which one of the following types of credit may be extended in Requirements case-12 CFR 221.3, 221.7:

Accepted Answer

The answer of Which one of the following types of...

Question 6

Regulation O both restricts lending to insiders and requires that certain loans to insiders be disclosed. Each banking agency has adopted the provisions of Regulation O for administrative enforcement purposes. These were not found to be useful in preventing insider lending abuse. Regulation O governs which of the following areas major areas:

Accepted Answer

Regulation O governs both lending to insiders and disclosures of loans made to insiders.

Question 7

What is actually a Single credit rule-12 CFR 221.3(d)?

Accepted Answer

The Single credit rule under 12 CFR 221.3(d) encompasses all the aspects mentioned in choices A, B, and C, making all of them correct.

Question 8

Under collateral requirements-12CFR 221.7, maximum loan value of margin stock is:

Accepted Answer

The answer of Under collateral requirements-12CFR 221.7, maximum loan value...

Question 9

Banks may extend and maintain purpose credit without complying with Regulation U if the credit is extended:

Accepted Answer

C: This is an exception to Regulation U that allows banks to extend credit to customers to temporarily finance the purchase or sale of securities for prompt delivery.D: This is another exception to Regulation U that allows banks to extend credit to customers to meet emergency expenses not reasonably foreseen.

Question 10

The maximum amount of credit that a bank may extend to all of its insiders is known as the ______________and is equal to 100 percent of its unimpaired capital and surplus.

Accepted Answer

The maximum amount of credit that a bank may extend to all of its insiders is known as the aggregate lending limit. This limit is set by the Federal Reserve and is equal to 100 percent of the bank's unimpaired capital and surplus. This limit is designed to prevent banks from engaging in risky lending practices or from providing preferential treatment to insiders.

Question 11

It is an extension of credit will be deemed to be made to an insider if the proceeds are transferred to the insider or used for the insider's benefit. This rule does not apply if the credit is made on substantially the same terms and conditions as those made to a noninsider and if the proceeds are used in a bona fide transaction involving the acquisition of property, goods, or services from the insider. What is it?

Accepted Answer

The Tangible Economic Benefit Rule under 12 CFR 215.3(f) states that an extension of credit is considered to be made to an insider if the proceeds are transferred to the insider or used for their benefit, unless certain conditions are met.

Question 12

Margin stock includes:

Accepted Answer

The answer of Margin stock includes:
...

Question 13

____________ is any company of which the bank is a subsidiary or any other subsidiary of the same company of which the bank is a subsidiary.

Accepted Answer

Affiliates are companies that are related to the bank by being a subsidiary of the same parent company, or by having the bank itself as a subsidiary. This relationship can impact the overall financial and operational performance of the bank, as well as influence the types of products and services the bank offers. Therefore, understanding and managing these affiliates is an important aspect of bank management.

Question 14

Under Renegotiations, extensions, and assumptions-12 CFR 213.5; any lease that is renegotiated or extended by longer than six months is considered to be a new lease, subject to new disclosure requirements, except when:

Accepted Answer

The answer of Under Renegotiations, extensions, and assumptions-12 CFR 213.5;...

Question 15

Unless excluded by a board resolution or the bylaws, the following officers will be considered to be executive officers EXCEPT:

Accepted Answer

The other options listed (Chairman of the board, President, and each vice-president and above) are considered to be executive officers unless specifically excluded. The fact that the fourth option is listed as "brokerage house's vice president" does not exclude them from being considered an executive officer, but their specific title may depend on the company's bylaws or board resolutions.

Question 16

Lending restrictions under requirements 12 CFR 215; 12 CFR 337, 12 CFR 349 are all of the following EXCEPT:

Accepted Answer

The statement "None of these" is incorrect because options A, B, and C all describe valid lending restrictions under the specified regulations.

Question 17

In Consumer Leasing Act Content of non-segregated disclosures may be made separately or as part of another document (such as the lease agreement); however, other information cannot be stated, used, or placed so as to mislead or confuse the consumer. Other disclosures include all of the following EXCEPT:

Accepted Answer

All of the options listed in A, B, and C are required disclosures under the Consumer Leasing Act, and are therefore not the correct answer. Option D, which describes maintenance responsibilities, is not specifically listed as a required disclosure in the Act, but may be included as part of the lease agreement or other documentation provided to the consumer.

Question 18

Purpose credit is credit for all of the following EXCEPT:

Accepted Answer

Purpose credit is credit provided for the explicit purpose of purchasing or carrying margin stock. Accidental purposes do not fall under the definition of purpose credit.

Question 19

An exempted borrower is a member of a national securities exchange or a registered broker or dealer who:

Accepted Answer

An exempted borrower is a member of a national securities exchange or a registered broker or dealer who maintains at least 1,000 active accounts annually for persons other than brokers, dealers, and persons associated with brokers and dealers, or earns at least $10 million in gross revenues on an annual basis from transactions with persons other than brokers, dealers, and persons associated with brokers and dealers, or earns at least 10 percent of its gross revenues on an annual basis from transactions with persons other than brokers, dealers, and persons associated with brokers and dealers.

Question 20

In Advertising-12 CFR 213.7, if a percentage rate is used in an advertisement, it cannot be more prominent than any other disclosure, EXCEPT:

Accepted Answer

The exception in Advertising-12 CFR 213.7 is for the warning regarding the limitation of the rate as a measurement of cost.

Exam 1: Certified Regulatory Compliance Manager