Banking Regulations and Compliance Flashcards
7 cards from real CBP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Banking Regulations and Compliance flashcards as text
A bank is required to file a Currency Transaction Report (CTR) when a customer conducts a cash transaction in excess of:
Answer: $10,000
Banks must file a CTR for any cash transaction exceeding $10,000, whether a deposit, withdrawal, exchange, or other payment.
The Home Mortgage Disclosure Act (HMDA) requires lenders to collect and report data primarily to help identify:
Answer: Potential discriminatory lending patterns and credit gaps
HMDA data is used by regulators and the public to detect discriminatory lending, assess whether institutions serve community needs, and identify lending gaps.
Under the Truth in Lending Act (TILA) and Regulation Z, the Annual Percentage Rate (APR) disclosure is designed to:
Answer: Allow borrowers to compare the true cost of credit across lenders
APR expresses the total cost of credit (interest plus fees) as a yearly rate, enabling meaningful comparisons across different loan products and lenders.
Which supervisory action allows a federal regulator to require a bank to stop an unsafe or unsound practice immediately, even before a formal hearing?
Answer: Temporary Cease and Desist Order
A Temporary Cease and Desist Order (TCDO) can be issued before a hearing when regulators determine an immediate halt is necessary to protect depositors.
Under Prompt Corrective Action (PCA) framework, a bank is classified as 'Critically Undercapitalized' when its tangible equity to total assets ratio falls below:
Answer: 2%
A bank is critically undercapitalized when its tangible equity ratio falls below 2%, triggering the most severe PCA restrictions including mandatory closure timelines.
The Fair Debt Collection Practices Act (FDCPA) primarily regulates:
Answer: Third-party debt collectors pursuing consumer debts on behalf of creditors
The FDCPA applies to third-party debt collectors and prohibits abusive, deceptive, or unfair practices when collecting consumer debts owed to another party.
Which of the following is a key requirement under the Bank Secrecy Act's 'beneficial ownership' rule for legal entity customers?
Answer: Banks must identify natural persons owning 25% or more of the legal entity and one controlling person
FinCEN's beneficial ownership rule requires banks to identify natural persons owning 25%+ equity interest and at least one individual with significant control of the entity.