APRP Regulatory Compliance 5

Question 1

Under the Gramm-Leach-Bliley Act (GLBA), payment companies that qualify as financial institutions must provide customers with:

Accepted Answer

Privacy notices explaining information sharing practices

Answer

GLBA requires financial institutions to provide customers with clear privacy notices describing how personal financial information is collected and shared.

Question 2

Which international standard framework specifically addresses AML controls and is used as a global benchmark by regulators?

Accepted Answer

FATF Recommendations

Answer

The Financial Action Task Force (FATF) Recommendations are the internationally recognized standards for combating money laundering and terrorist financing.

Question 3

A prepaid card issuer is subject to which regulation's requirements regarding fee disclosures and error resolution for consumer prepaid accounts?

Accepted Answer

Regulation E (Prepaid Accounts Rule)

Answer

The CFPB's Prepaid Accounts Rule, an amendment to Regulation E, requires fee disclosures, error resolution rights, and access to account information for prepaid cards.

Question 4

In payments compliance, what is a 'de-risking' strategy and why is it controversial?

Accepted Answer

Terminating relationships with entire categories of higher-risk customers to avoid compliance burden

Answer

De-risking involves exiting entire customer segments (e.g., money service businesses) to avoid AML compliance costs, which regulators criticize for excluding legitimate customers from financial services.

Question 5

Which act extended BSA requirements to money services businesses (MSBs), including certain payment processors and money transmitters?

Accepted Answer

USA PATRIOT Act

Answer

The USA PATRIOT Act of 2001 significantly expanded BSA requirements, bringing MSBs such as money transmitters under full AML program obligations.

APRP - Accredited Payments Risk Professional Practice Test

APRP - Accredited Payments Risk Professional Practice Test

APRP Regulatory Compliance 5