CBP Banking Regulations and Compliance 3

Question 1

A bank is required to file a Currency Transaction Report (CTR) when a customer conducts a cash transaction in excess of:

Accepted Answer

$10,000

Answer

Banks must file a CTR for any cash transaction exceeding $10,000, whether a deposit, withdrawal, exchange, or other payment.

Question 2

The Home Mortgage Disclosure Act (HMDA) requires lenders to collect and report data primarily to help identify:

Accepted Answer

Potential discriminatory lending patterns and credit gaps

Answer

HMDA data is used by regulators and the public to detect discriminatory lending, assess whether institutions serve community needs, and identify lending gaps.

Question 3

Under the Truth in Lending Act (TILA) and Regulation Z, the Annual Percentage Rate (APR) disclosure is designed to:

Accepted Answer

Allow borrowers to compare the true cost of credit across lenders

Answer

APR expresses the total cost of credit (interest plus fees) as a yearly rate, enabling meaningful comparisons across different loan products and lenders.

Question 4

Which supervisory action allows a federal regulator to require a bank to stop an unsafe or unsound practice immediately, even before a formal hearing?

Accepted Answer

Temporary Cease and Desist Order

Answer

A Temporary Cease and Desist Order (TCDO) can be issued before a hearing when regulators determine an immediate halt is necessary to protect depositors.

Question 5

Under Prompt Corrective Action (PCA) framework, a bank is classified as 'Critically Undercapitalized' when its tangible equity to total assets ratio falls below:

Accepted Answer

2%

Answer

A bank is critically undercapitalized when its tangible equity ratio falls below 2%, triggering the most severe PCA restrictions including mandatory closure timelines.

(CBP) Certified Banking Professional Practice Test

(CBP) Certified Banking Professional Practice Test

CBP Banking Regulations and Compliance 3