Ethics in Banking Flashcards
7 cards from real Banking practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Ethics in Banking flashcards as text
What is 'redlining' in the context of banking ethics?
Answer: Denying services to residents of certain neighborhoods based on race or ethnicity
Redlining is the discriminatory practice of refusing financial services to people in specific geographic areas based on racial or ethnic composition.
A bank teller is pressured by a manager to open accounts for customers without their explicit consent to meet sales quotas. This situation is most similar to which real-world scandal?
Answer: The Wells Fargo fake accounts scandal
Wells Fargo employees opened millions of unauthorized accounts under pressure from aggressive sales quotas, resulting in massive regulatory penalties.
Under the Equal Credit Opportunity Act (ECOA), which basis for denying credit is explicitly prohibited?
Answer: National origin
ECOA prohibits discrimination in credit decisions based on race, color, religion, national origin, sex, marital status, or age.
A bank executive sells personal shares in a bank client's company just before publishing a negative research report about that company. This is best described as:
Answer: Insider trading
Using material non-public information to trade securities before publishing research that will move the market is insider trading, which is illegal.
What is the primary purpose of a bank's ethics hotline or whistleblower program?
Answer: To allow employees to report misconduct without fear of retaliation
Whistleblower programs create a safe, confidential channel for employees to report ethical violations or illegal conduct without fear of losing their jobs.
Which regulatory body enforces consumer protection laws against unfair, deceptive, or abusive acts or practices (UDAAP) by banks?
Answer: Consumer Financial Protection Bureau (CFPB)
The CFPB was created by the Dodd-Frank Act specifically to protect consumers from unfair, deceptive, or abusive financial practices.
A bank charges a fee that is disclosed only in fine print buried in a 50-page agreement, and most customers are unaware of it. This practice likely violates which standard?
Answer: Transparency and fairness principles
Burying material fee disclosures in fine print so customers cannot reasonably find them is considered deceptive and violates transparency requirements.