Banking Exam Banking Regulations and Compliance 3

Question 1

Under the Truth in Lending Act (TILA), what must lenders disclose using the Annual Percentage Rate (APR)?

Accepted Answer

The true cost of credit including fees and interest

Answer

TILA requires lenders to disclose the APR, which reflects the total cost of borrowing including interest and fees, enabling consumers to compare loan offers.

Question 2

A bank's Tier 1 capital under Basel III primarily consists of which components?

Accepted Answer

Common equity and retained earnings

Answer

Tier 1 capital, the core measure of a bank's financial strength, primarily consists of common equity (common stock) and retained earnings.

Question 3

Which regulation prohibits banks from discriminating in credit transactions based on race, color, religion, national origin, sex, marital status, or age?

Accepted Answer

Regulation B (Equal Credit Opportunity Act)

Answer

Regulation B implements the Equal Credit Opportunity Act, which prohibits creditors from discriminating against applicants based on protected characteristics.

Question 4

What is the primary function of the Consumer Financial Protection Bureau (CFPB)?

Accepted Answer

Supervising and enforcing consumer financial protection laws

Answer

The CFPB, created by the Dodd-Frank Act in 2010, is responsible for enforcing federal consumer financial protection laws and regulating financial products.

Question 5

Under the Bank Secrecy Act, a Currency Transaction Report (CTR) must be filed for cash transactions exceeding what threshold?

Accepted Answer

$10,000

Answer

Banks must file a CTR with FinCEN for any cash transaction exceeding $10,000 in a single business day.

Banking Exam Practice Test

Banking Exam Practice Test

Banking Exam Banking Regulations and Compliance 3