Regulatory Compliance 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 Regulatory Compliance flashcards as text
Under the Community Reinvestment Act (CRA), what are banks primarily evaluated on?
Answer: Their efforts to meet the credit needs of low- and moderate-income communities
The CRA requires federal regulators to assess how well banks fulfill the credit needs of the communities they serve, including low- and moderate-income neighborhoods.
Which regulation implements the Truth in Lending Act (TILA) and requires disclosure of the Annual Percentage Rate (APR)?
Answer: Regulation Z
Regulation Z implements TILA and mandates that lenders disclose the cost of credit including the APR so consumers can compare loan terms.
What is the primary purpose of the Bank Secrecy Act (BSA)?
Answer: To require banks to assist government agencies in detecting and preventing money laundering
The BSA, also known as the Financial Recordkeeping and Reporting of Currency and Foreign Transactions Act, requires financial institutions to maintain records and file reports that help identify and prevent money laundering.
A Currency Transaction Report (CTR) must be filed for cash transactions exceeding what threshold?
Answer: $10,000
Under the Bank Secrecy Act, financial institutions must file a CTR for any cash transaction or series of related transactions exceeding $10,000.
Which federal agency is primarily responsible for enforcing the Fair Housing Act as it applies to mortgage lending?
Answer: Department of Housing and Urban Development (HUD)
HUD has primary enforcement authority for the Fair Housing Act, which prohibits discrimination in residential real estate transactions including mortgage lending.
Under Dodd-Frank, banks with total assets exceeding what threshold are subject to enhanced prudential standards from the Federal Reserve?
Answer: $100 billion
Originally set at $50 billion by Dodd-Frank, the Economic Growth Act of 2018 raised the threshold for enhanced prudential standards to $100 billion in total consolidated assets.
What does 'Know Your Customer' (KYC) primarily require banks to do?
Answer: Verify the identity of clients and assess the risk of illegal intentions
KYC procedures require banks to verify customer identities, understand the nature of their activities, and assess money laundering and terrorist financing risks.