Question 1

Which of the following is an accurate statement according to the requirements of the customer identification program regulations?

Options :

A : A bank must always require documentary verification of a customer’s identification

B : A bank may waive any part of the CIP requirements if senior management approves the waiver and there is a good cause

C : A physical address or a post office box is acceptable for any new customer

D : The bank’s CIP program must enable it to form a reasonable belief about the identity of the person

Answer: D

Question 2

How long after discovery does a bank have to report any lost or missing securities when criminal activity is suspected?

Options :

A : 90 calendar days

B : 1 business day

C : Never. Law enforcement must report

D : 10 business days

Answer: B

Question 3

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

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

Options :

A : Regulation U

B : Regulation V

C : . Regulation Z

D : Regulation X

Answer: A

Question 5

Underwriting standards in Subprime Mortgage Lending include:

Options :

A : The borrower’s debt-to-income ratio should include the borrower’s total yearly housing-related payments as a percentage of gross monthly income

B : Institutions should have a clear policy governing the use of risk-layering features, such as reduced documentation loans or simultaneous second lien mortgages

C : Stated income and reduced documentation loans to subprime borrowers should be made only if there are clear, documented mitigating factors

D : Mitigating factors should be present when risk layering features are combined in order to support the underwriting decision and the borrower’s repayment capacity

Answer: A

Confidently Practice Online with Free CRCM Exam Cram

Buying Options: