CBP Banking Operations Management 3

Question 1

A bank discovers that a branch teller has been structuring customer deposits in amounts just under $10,000 to avoid CTR filing. This practice is known as:

Accepted Answer

Structuring

Answer

Structuring — also called smurfing — is the illegal practice of breaking up transactions to evade BSA reporting thresholds, and is itself a federal crime.

Question 2

Under Regulation CC (Availability of Funds), what is the maximum hold period a bank may place on a local check deposit for a non-new account under standard rules?

Accepted Answer

2 business days

Answer

Regulation CC limits standard holds on local checks to 2 business days for established accounts, with next-day availability for certain items like government checks.

Question 3

The primary purpose of a bank's Asset-Liability Committee (ALCO) is to:

Accepted Answer

Manage interest rate risk and balance sheet composition

Answer

ALCO manages the bank's interest rate risk, liquidity position, and the mix of assets and liabilities to optimize profitability within acceptable risk parameters.

Question 4

Which Federal Reserve tool directly influences the cost at which banks borrow reserves from each other overnight?

Accepted Answer

Federal funds rate target

Answer

The Federal Open Market Committee (FOMC) sets a target range for the federal funds rate, which banks use when lending excess reserves to each other overnight.

Question 5

In check processing operations, MICR stands for:

Accepted Answer

Magnetic Ink Character Recognition

Answer

MICR uses magnetic ink to encode routing numbers, account numbers, and check amounts at the bottom of checks, enabling high-speed automated processing.

(CBP) Certified Banking Professional Practice Test

(CBP) Certified Banking Professional Practice Test

CBP Banking Operations Management 3