Retail Banking Products 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 Retail Banking Products flashcards as text
A customer holds a savings account at Bank A and a checking account at Bank B, each with $200,000. How much of these deposits is FDIC-insured?
Answer: $400,000 — $250,000 per depositor per institution at each bank
FDIC insures up to $250,000 per depositor per insured bank per ownership category, so deposits at two separate banks are independently insured up to $250,000 each.
What does the debt-to-income (DTI) ratio measure in a retail mortgage underwriting context?
Answer: Monthly debt obligations divided by gross monthly income
DTI compares total monthly debt payments (including the proposed mortgage) to gross monthly income, helping lenders assess repayment capacity.
A bank customer receives a check and deposits it on Monday. Under Regulation CC, when must the bank generally make the first $225 of that local check available?
Answer: The next business day (Tuesday)
Regulation CC requires banks to make at least $225 of any non-exception deposit available by the next business day after the banking day of deposit.
Which retail banking product combines the features of a checking account and a brokerage account, allowing customers to invest in securities while retaining check-writing privileges?
Answer: Cash management account (CMA)
A cash management account sweeps idle cash into money market funds or securities while providing debit card and check-writing access.
A customer asks about 'points' on a mortgage. What does each point represent?
Answer: 1% of the loan amount paid upfront to reduce the interest rate
Each discount point equals 1% of the loan principal paid at closing, and in exchange the lender reduces the mortgage interest rate.
A bank issues a 'cashier's check' to a customer. What makes this instrument more trusted than a personal check?
Answer: The bank itself is the drawer and guarantees the funds from its own account
A cashier's check is drawn on the bank's own funds, not the customer's account, so the bank guarantees payment making it far more secure than a personal check.
Which feature of a home equity loan distinguishes it from a HELOC?
Answer: A home equity loan disburses a lump sum at a fixed rate, while a HELOC is a revolving credit line
A home equity loan (also called a second mortgage) provides a one-time lump sum at a fixed rate, whereas a HELOC works like a credit card with a variable rate and revolving access.