CBP Banking Regulations and Compliance 5

Question 1

Under the Sarbanes-Oxley Act (SOX), which section requires management of public companies, including publicly traded banks, to assess the effectiveness of internal controls over financial reporting?

Accepted Answer

Section 404

Answer

SOX Section 404 requires management to assess and certify the effectiveness of internal controls over financial reporting, with external auditor attestation.

Question 2

A bank subject to the Military Lending Act (MLA) must ensure that loans to covered borrowers — active-duty military members and dependents — do not exceed a Military Annual Percentage Rate (MAPR) of:

Accepted Answer

28%

Answer

The MLA caps the MAPR on consumer credit to covered military borrowers at 36%, including interest, fees, and add-on products.

Question 3

Under the Fair Credit Reporting Act (FCRA), if a consumer disputes inaccurate information on their credit report, the credit reporting agency must investigate and resolve the dispute within:

Accepted Answer

30 days

Answer

FCRA requires credit reporting agencies to complete their reinvestigation of disputed items within 30 days (or 45 days if the consumer submits additional information).

Question 4

A bank's compliance team is reviewing a loan portfolio for potential fair lending issues using statistical analysis. This approach is most directly associated with which type of discrimination theory?

Accepted Answer

Disparate impact through neutral policies with discriminatory effects

Answer

Disparate impact analysis uses statistical methods to identify neutral lending policies that disproportionately exclude or harm protected classes, even without discriminatory intent.

Question 5

Which federal law establishes the framework for the resolution and liquidation of large, complex financial institutions to avoid taxpayer-funded bailouts?

Accepted Answer

Dodd-Frank Orderly Liquidation Authority (Title II)

Answer

Dodd-Frank's Title II Orderly Liquidation Authority gives the FDIC resolution powers over large failing financial companies to avoid systemic collapse without public bailouts.

(CBP) Certified Banking Professional Practice Test

(CBP) Certified Banking Professional Practice Test

CBP Banking Regulations and Compliance 5