Question 1

An electronic image of an item together with electronic information describing that item in an

approved format will be considered a valid instrument. Common forms of instruments are the

following EXCEPT:

Options :

A : Checks: Drafts drawn on a bank and payable on demand

B : Pay checks

C : Cash items: Checks or other items payable on demand and collectible at par and accepted at the Reserve Bank

D : Noncash items: Items that a Reserve Bank classifies as requiring special handling

Answer: B

Question 2

What information must be on the loan application registers for home loans on property located within the bank’s metropolitan area?

Options :

A : The county, census tract, and metropolitan area of the property

B : The address, census tract, and metropolitan area of the property

C : The county, address, and fair market value of the property

D : The name, address, and metropolitan area of the applicant

Answer: A

Question 3

Is the renewal of a loan considered to be a new extension of credit for purposes of valuing the collateral under Regulation U?

Options :

A : Yes

B : Yes, if any additional amounts are added to the loan balance

C : Yes, if any amounts other than interest, service charges, or taxes are added to the loan balance

D : No, a renewal is never considered to be a new credit

Answer: C

Question 4

A compliance professional’s responsibilities include all of the following EXCEPT:

Options :

A : Understanding the business units operating environment and risk tolerance

B : Performing risk assessments with the assistance of business units to determine current risk levels and risks associated with the bank’s products, lines of business, customers, and locations, among other factors

C : Working with business units to ensure prompt corrective action for any detected errors

D : Assisting business lines with compliance training for employees, as needed

Answer: D

Question 5

Credit scoring systems:

Options :

A : Evaluate an applicant’s creditworthiness mechanically, based on key attributes of the applicant and aspects of the transaction, and determine, alone or in conjunction with an evaluation of additional information about the applicant, whether an applicant is deemed creditworthy

B : Are evaluated by regulatory agencies to determine whether they are empirically derived and statistically sound and to examine: The bank’s policies on the use of the credit scoring system Training of bank employees on the use of the system The number of high-side and low-side overrides of the system

C : Both of these

D : None of these

Answer: C

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