Banking Regulations and Compliance Flashcards
7 cards from real Banking Exam practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Banking Regulations and Compliance flashcards as text
Which act established the FDIC and the federal deposit insurance system?
Answer: The Glass-Steagall Act of 1933
The Banking Act of 1933, commonly known as the Glass-Steagall Act, created the FDIC to restore public confidence in the banking system after widespread bank failures during the Great Depression.
Under Regulation D, what types of accounts are subject to reserve requirements?
Answer: Transaction accounts such as demand deposits
Regulation D historically imposed reserve requirements primarily on transaction accounts (demand deposits and NOW accounts), though the Federal Reserve reduced these requirements to zero in 2020.
What is 'structuring' in the context of banking compliance?
Answer: Breaking up large cash transactions to evade CTR reporting thresholds
Structuring, also called 'smurfing,' involves deliberately breaking transactions into smaller amounts to avoid the $10,000 CTR filing requirement, and is a federal crime.
Under the Fair Credit Reporting Act (FCRA), how long can most negative information remain on a consumer's credit report?
Answer: 7 years
The FCRA generally limits most negative credit information, such as late payments and collections, to 7 years from the date of the first delinquency.
Which of the following best describes the purpose of the Office of Foreign Assets Control (OFAC)?
Answer: Administering and enforcing economic and trade sanctions
OFAC, a division of the U.S. Treasury, administers sanctions programs targeting foreign countries, entities, and individuals to advance U.S. national security and foreign policy objectives.
The Home Mortgage Disclosure Act (HMDA) primarily requires lenders to collect and report data about mortgage applications to help identify what?
Answer: Potential discriminatory lending patterns
HMDA data is used by regulators and the public to identify possible discriminatory lending practices and to assess whether financial institutions are serving the housing needs of their communities.
A bank that is found to have an 'unsatisfactory' CRA rating may face which consequence?
Answer: Denial of applications for mergers, acquisitions, or new branches
Regulators may deny or condition approval of a bank's application to merge, open new branches, or expand if the bank has an unsatisfactory CRA rating.