CCM Regulatory Compliance & Governance 3

Question 1

Under the Uniform Commercial Code (UCC) Article 9, a secured creditor's priority over other creditors is generally established by:

Accepted Answer

The date and time of perfection, typically by filing a financing statement

Answer

Under UCC Article 9, priority among secured creditors is generally determined by the order of perfection, most commonly through the filing of a UCC-1 financing statement.

Question 2

Which of the following actions would trigger a mandatory SAR (Suspicious Activity Report) filing obligation for a financial institution?

Accepted Answer

A transaction appears to involve funds from illegal activity with no lawful explanation

Answer

SARs must be filed when a financial institution knows, suspects, or has reason to suspect that a transaction involves funds from illegal activity or is designed to evade reporting requirements.

Question 3

The Equal Credit Opportunity Act (ECOA) requires creditors to notify applicants of adverse action within how many days of receiving a completed credit application?

Accepted Answer

30 days

Answer

ECOA requires creditors to notify applicants of adverse action within 30 days of receiving a completed credit application.

Question 4

A credit manager applies stricter credit terms to applicants from a specific zip code that correlates with minority neighborhoods. This practice is known as:

Accepted Answer

Redlining

Answer

Redlining refers to the discriminatory practice of denying or limiting financial services to residents of specific areas based on racial or ethnic composition, which violates ECOA and the Fair Housing Act.

Question 5

Under Basel III capital requirements, what is the minimum Common Equity Tier 1 (CET1) capital ratio that banks must maintain?

Accepted Answer

4.5%

Answer

Basel III requires banks to maintain a minimum CET1 capital ratio of 4.5% of risk-weighted assets.

(CCM) Certified Credit Manager Practice Test

(CCM) Certified Credit Manager Practice Test

CCM Regulatory Compliance & Governance 3