Banking Exam Banking Regulations and Ethics 2

Question 1

Under the Dodd-Frank Act, which agency was created to protect consumers from unfair, deceptive, or abusive financial practices?

Accepted Answer

Consumer Financial Protection Bureau

Answer

The Dodd-Frank Act of 2010 established the Consumer Financial Protection Bureau (CFPB) to oversee consumer financial products and services.

Question 2

A bank employee notices a colleague approving loans to family members at below-market rates without disclosure. This is an example of:

Accepted Answer

Conflicts of interest

Answer

Approving loans to family members at preferential rates without disclosure constitutes a conflict of interest, violating ethical standards and banking regulations.

Question 3

The Bank Secrecy Act requires financial institutions to file a Currency Transaction Report (CTR) for cash transactions exceeding what threshold?

Accepted Answer

$10,000

Answer

The BSA mandates CTR filings for cash transactions exceeding $10,000 in a single business day.

Question 4

Which regulation implements the Community Reinvestment Act's requirements for banks to meet credit needs of their communities?

Accepted Answer

Regulation BB

Answer

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.

Question 5

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:

Accepted Answer

Structuring (smurfing)

Answer

Structuring (also called smurfing) is the illegal practice of breaking large transactions into smaller amounts to evade BSA reporting requirements.

Banking Exam Practice Test

Banking Exam Practice Test

Banking Exam Banking Regulations and Ethics 2