Banking Regulations and Ethics 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 Ethics flashcards as text
Under the Dodd-Frank Act, which agency was created to protect consumers from unfair, deceptive, or abusive financial practices?
Answer: Consumer Financial Protection Bureau
The Dodd-Frank Act of 2010 established the Consumer Financial Protection Bureau (CFPB) to oversee consumer financial products and services.
A bank employee notices a colleague approving loans to family members at below-market rates without disclosure. This is an example of:
Answer: Conflicts of interest
Approving loans to family members at preferential rates without disclosure constitutes a conflict of interest, violating ethical standards and banking regulations.
The Bank Secrecy Act requires financial institutions to file a Currency Transaction Report (CTR) for cash transactions exceeding what threshold?
Answer: $10,000
The BSA mandates CTR filings for cash transactions exceeding $10,000 in a single business day.
Which regulation implements the Community Reinvestment Act's requirements for banks to meet credit needs of their communities?
Answer: Regulation BB
Regulation BB implements the CRA, requiring banks to help meet the credit needs of all segments of their local communities, including low- and moderate-income areas.
A teller receives instructions from a manager to process a large cash transaction in two separate $6,000 amounts to avoid CTR filing. This practice is called:
Answer: Structuring (smurfing)
Structuring (also called smurfing) is the illegal practice of breaking large transactions into smaller amounts to evade BSA reporting requirements.
Under the Equal Credit Opportunity Act (ECOA), which of the following is NOT a prohibited basis for credit discrimination?
Answer: Credit score
ECOA prohibits discrimination based on race, color, religion, national origin, sex, marital status, age, or public assistance status; credit score is a legitimate financial factor.
Which provision of the Gramm-Leach-Bliley Act requires banks to provide customers with privacy notices and opt-out options?
Answer: Financial Privacy Rule
The Financial Privacy Rule under GLBA requires financial institutions to provide customers with annual privacy notices and an opt-out opportunity for sharing nonpublic personal information.