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Regulatory Compliance and AML Flashcards

7 cards from real CBA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Regulatory Compliance and AML flashcards as text

  1. Under the Community Reinvestment Act (CRA), federal regulators evaluate a bank's record of meeting credit needs in its:

    Answer: Assessment area, typically its local communities

    CRA evaluations focus on how well a bank serves the credit needs of its defined assessment area, which encompasses the communities where it operates.

  2. Which federal law prohibits discriminatory credit practices based on race, color, religion, national origin, sex, marital status, or age?

    Answer: Equal Credit Opportunity Act (ECOA)

    ECOA (Regulation B) prohibits creditors from discriminating against applicants based on protected characteristics, including race, sex, religion, national origin, and age.

  3. A bank auditor reviewing HMDA data discovers that the bank's denial rate for minority applicants is significantly higher than for similarly qualified white applicants. This is most consistent with:

    Answer: Disparate impact or disparate treatment in lending

    Disproportionate denial rates for minority applicants relative to similarly qualified non-minorities is a classic indicator of disparate treatment or disparate impact under fair lending laws.

  4. Under the Truth in Lending Act (TILA), Regulation Z requires lenders to disclose the Annual Percentage Rate (APR) primarily to:

    Answer: Allow borrowers to compare credit costs across different loan products

    TILA's APR disclosure is designed to give borrowers a standardized cost metric so they can meaningfully compare the true cost of credit across different lenders and products.

  5. The Bank Secrecy Act requires financial institutions to retain records of certain transactions for a minimum of how many years?

    Answer: 5 years

    The BSA generally requires financial institutions to retain records, including CTRs and supporting documentation, for a minimum of 5 years.

  6. Which program requires financial institutions to implement risk-based procedures for verifying the identity of customers at account opening?

    Answer: Customer Identification Program (CIP)

    The Customer Identification Program (CIP), mandated by the USA PATRIOT Act Section 326, requires banks to collect and verify identifying information from customers when opening accounts.

  7. Under RESPA (Real Estate Settlement Procedures Act), which practice is explicitly prohibited?

    Answer: Paying kickbacks or referral fees between settlement service providers

    RESPA Section 8 prohibits the payment or receipt of kickbacks and unearned fees between settlement service providers, such as referral fees between lenders and title companies.