Question 1

The OCC recommends all but one of the following actions to help prevent a national bank’s

purchasing or acquiring predatory or abusive loans. Which practice is NOT recommended?

Options :

A :

Establish policies on the bank’s relationship with third-party brokers and originators

B : Review loan documentation

C : Audit the third-party broker

D : Require the broker to establish a reserve account for legal contingencies

Answer: D

Question 2

First National Bank would like to adopt a recordkeeping system that complies with the requirements

of Regulation O. Which of the following best describes the recordkeeping system required by

Regulation O?

Options :

A :

A system in which the bank annually surveys all executive officers of First National and its affiliates

to determine the insiders’ related interests

B :

A system in which the bank asks all borrowers as loans are made whether the borrower is a

related interest of an insider

C :

A system that surveys insiders of First National annually and requires each insider to disclose his or

her related interests

D : A system that requires an annual survey of affiliate insiders

Answer: C

Question 3

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 4

A routine review of account records reveals that suspicious activity involving foreign currency has occurred in the account of one of the bank’s directors. Which of the following actions should be taken FIRST?

Options :

A : A SAR should be filed.

B : The bank’s board of directors should discuss the account activity without the affected director being present.

C : The bank’s president should meet with the affected director to discuss the account activity.

D : . The bank should file a CTR, checking the box that indicates the report is for suspicious activity.

Answer: A

Question 5

Your institution has identified a transaction by an existing depositor that should be blocked under

OFAC requirements. The branch manager contacts you for specific instructions. Before reporting the

transaction to OFAC, what should the bank do?

Options :

A : Reject the transaction

B : Process the transaction

C :

Close the customer’s account

D : Place the funds in an interest-bearing account

Answer: D

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