Compliance, Risk and Regulations 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 Compliance, Risk and Regulations flashcards as text
What is 'concentration risk' in a bank's loan portfolio?
Answer: Risk from excessive exposure to a single borrower, sector, or geography
Concentration risk arises when a bank has large exposures to a single entity, industry, or region, meaning a downturn in that area could cause outsized losses.
Which regulation implements the Fair Housing Act's provisions prohibiting discrimination in residential mortgage lending?
Answer: Regulation C
Regulation C implements the Home Mortgage Disclosure Act (HMDA), requiring lenders to collect and report data used to identify discriminatory lending patterns.
A Suspicious Activity Report (SAR) must generally be filed within how many calendar days of detecting a suspicious transaction?
Answer: 30 days
FinCEN rules require banks to file a SAR within 30 calendar days of initially detecting suspicious activity, or 60 days if no suspect is identified.
Which component of Basel III was specifically introduced to address systemic risk during periods of economic stress?
Answer: Countercyclical capital buffer
The countercyclical capital buffer requires banks to build up extra capital during credit booms to absorb losses during downturns, reducing procyclicality.
Under the Equal Credit Opportunity Act (ECOA), which action by a lender is explicitly prohibited?
Answer: Discriminating against an applicant based on marital status
ECOA prohibits credit discrimination on the basis of race, color, religion, national origin, sex, marital status, age, or receipt of public assistance.
What is the role of the Financial Stability Oversight Council (FSOC)?
Answer: Identifying and responding to systemic risks to U.S. financial stability
FSOC, created by Dodd-Frank, monitors and addresses systemic risks to U.S. financial stability and can designate non-bank financial companies as systemically important.
Which of the following best describes 'stress testing' in a banking compliance context?
Answer: Simulating adverse economic scenarios to assess a bank's capital adequacy
Stress testing evaluates how a bank's capital and liquidity would hold up under hypothetical adverse economic conditions, informing supervisory and risk management decisions.