Practice Test Geeks(CBA) Certified Bank Auditor Practice Test
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Regulatory Compliance Audits Flashcards

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  1. During a compliance audit of a bank's anti-money laundering (AML) program, the auditor finds that Customer Due Diligence (CDD) procedures do not include beneficial ownership collection for legal entity customers. Which FinCEN rule is the bank violating?

    Answer: FinCEN's Beneficial Ownership Rule (31 CFR 1010.230)

    FinCEN's Beneficial Ownership Rule requires covered financial institutions to collect information on natural persons owning 25% or more of legal entity customers.

  2. Under the Gramm-Leach-Bliley Act (GLBA) Safeguards Rule, what is a bank's primary obligation regarding its information security program?

    Answer: Develop, implement, and maintain a comprehensive written information security program

    The GLBA Safeguards Rule requires financial institutions to implement a written information security program with administrative, technical, and physical safeguards.

  3. A compliance auditor reviewing Regulation CC (Availability of Funds) finds that a bank places a 7-business-day hold on all local checks. What is the likely violation?

    Answer: Regulation CC requires local checks to be made available no later than the second business day after deposit

    Regulation CC generally requires local checks to be available by the second business day following deposit, making a blanket 7-day hold a violation.

  4. Which of the following would be considered a 'red flag' under the FTC's Red Flags Rule when auditing an identity theft prevention program at a bank?

    Answer: A notice from a credit agency of a fraud alert on a customer's file

    A fraud alert notice from a credit reporting agency is explicitly listed in the Red Flags Rule as a pattern, practice, or activity indicating possible identity theft.

  5. When auditing a bank's compliance with the Military Lending Act (MLA), which interest rate cap applies to covered consumer credit products offered to active-duty servicemembers?

    Answer: 36% Military Annual Percentage Rate (MAPR)

    The MLA caps the Military Annual Percentage Rate (MAPR) at 36% for covered consumer credit products offered to active-duty servicemembers and their dependents.

  6. A bank auditor testing Regulation B (Equal Credit Opportunity Act) finds loan officers are requesting applicants' race and national origin on non-HMDA-reportable applications. What is the correct finding?

    Answer: A violation because Regulation B prohibits collecting race/national origin data on non-HMDA applications

    Regulation B generally prohibits creditors from requesting race, color, religion, national origin, or sex on applications not subject to HMDA government monitoring requirements.

  7. Under the Bank Secrecy Act, which of the following scenarios requires a bank to file a Suspicious Activity Report (SAR)?

    Answer: A series of transactions totaling $15,000 that appear structured to evade CTR reporting

    Structuring transactions to avoid the CTR threshold is itself a federal crime (31 U.S.C. § 5324) and always requires SAR filing regardless of the dollar amounts.