CBA Regulatory Compliance Audits 3

Question 1

During a compliance audit of a bank's anti-money laundering (AML) program, the auditor finds that Customer Due Diligence (CDD) procedures do not include beneficial ownership collection for legal entity customers. Which FinCEN rule is the bank violating?

Accepted Answer

FinCEN's Beneficial Ownership Rule (31 CFR 1010.230)

Answer

FinCEN's Beneficial Ownership Rule requires covered financial institutions to collect information on natural persons owning 25% or more of legal entity customers.

Question 2

Under the Gramm-Leach-Bliley Act (GLBA) Safeguards Rule, what is a bank's primary obligation regarding its information security program?

Accepted Answer

Develop, implement, and maintain a comprehensive written information security program

Answer

The GLBA Safeguards Rule requires financial institutions to implement a written information security program with administrative, technical, and physical safeguards.

Question 3

A compliance auditor reviewing Regulation CC (Availability of Funds) finds that a bank places a 7-business-day hold on all local checks. What is the likely violation?

Accepted Answer

Regulation CC requires local checks to be made available no later than the second business day after deposit

Answer

Regulation CC generally requires local checks to be available by the second business day following deposit, making a blanket 7-day hold a violation.

Question 4

Which of the following would be considered a 'red flag' under the FTC's Red Flags Rule when auditing an identity theft prevention program at a bank?

Accepted Answer

A notice from a credit agency of a fraud alert on a customer's file

Answer

A fraud alert notice from a credit reporting agency is explicitly listed in the Red Flags Rule as a pattern, practice, or activity indicating possible identity theft.

Question 5

When auditing a bank's compliance with the Military Lending Act (MLA), which interest rate cap applies to covered consumer credit products offered to active-duty servicemembers?

Accepted Answer

36% Military Annual Percentage Rate (MAPR)

Answer

The MLA caps the Military Annual Percentage Rate (MAPR) at 36% for covered consumer credit products offered to active-duty servicemembers and their dependents.

(CBA) Certified Bank Auditor Practice Test

(CBA) Certified Bank Auditor Practice Test

CBA Regulatory Compliance Audits 3