Certified Regulatory Compliance Manager MCQ Flashcards

Under the Bank Secrecy Act (BSA), what is the threshold amount that triggers a Currency Transaction Report (CTR)?

Answer: $10,000

The BSA requires financial institutions to file a CTR for any currency transaction exceeding $10,000 in a single business day.

Which federal agency is primarily responsible for enforcing the Equal Credit Opportunity Act (ECOA)?

Answer: Consumer Financial Protection Bureau (CFPB)

The CFPB has primary enforcement authority over ECOA for most financial institutions, prohibiting credit discrimination.

A bank's compliance officer discovers that the institution's loan officers have been steering minority applicants toward higher-cost loan products. This practice is best described as:

Answer: Disparate treatment

Steering minority applicants to inferior products based on their protected class characteristic is disparate treatment—intentional discriminatory action.

Under the Community Reinvestment Act (CRA), which examination component evaluates a bank's record of making loans in its assessment area?

Answer: Lending test

The lending test is the most heavily weighted CRA component and evaluates the number and dollar amount of loans made within the assessment area.

The Gramm-Leach-Bliley Act (GLBA) requires financial institutions to provide customers with a privacy notice:

Answer: At account opening and annually thereafter

GLBA requires an initial privacy notice at account opening and annual notices to all existing customers describing information-sharing practices.

Which regulation implements the Truth in Savings Act (TISA) and governs disclosure requirements for deposit accounts?

Answer: Regulation DD

Regulation DD implements TISA and requires depository institutions to disclose terms and conditions of deposit accounts, including APY.

A Suspicious Activity Report (SAR) must be filed within how many calendar days of the initial detection of facts that may constitute a violation?

Answer: 30 days

Financial institutions must file a SAR within 30 calendar days of initial detection, or 60 days if no suspect is identified.

Under the Children's Online Privacy Protection Act (COPPA), websites directed at children under what age must obtain verifiable parental consent before collecting personal information?

Answer: 13

COPPA requires operators of websites directed to children under 13 to obtain verifiable parental consent before collecting personal information from those children.

When a consumer disputes the accuracy of information in their credit report under the Fair Credit Reporting Act (FCRA), the credit reporting agency (CRA) must complete its investigation within:

Answer: 30 days (with a possible 15-day extension)

The FCRA requires CRAs to investigate disputes within 30 days, extendable to 45 days if the consumer provides additional relevant information during the investigation.

Which of the following actions would constitute a violation of the Unfair, Deceptive, or Abusive Acts or Practices (UDAAP) standard under Dodd-Frank?

Answer: Misrepresenting the cost of add-on products to obtain consumer consent

Misrepresenting the cost or terms of add-on products to manipulate consumer decision-making is a deceptive act or practice prohibited by UDAAP.

A customer opens a new account and provides identification. Under the Customer Identification Program (CIP) rules, the bank must verify the customer's identity:

Answer: Within a reasonable time before or after account opening

CIP rules require identity verification within a reasonable time before or after account opening, allowing flexibility for low-risk situations while ensuring due diligence.

The Dodd-Frank Wall Street Reform and Consumer Protection Act created the CFPB and granted it authority over:

Answer: Nonbank financial companies offering consumer financial products or services, and large banks

The CFPB has supervisory authority over nonbank financial companies and depository institutions with over $10 billion in assets, while smaller banks are supervised by their prudential regulators.

In a compliance risk assessment, 'inherent risk' is best defined as:

Answer: The level of risk present before any mitigating controls are considered

Inherent risk is the gross or raw level of risk that exists in a process or product before any controls, policies, or mitigating factors are taken into account.

Under the Home Ownership and Equity Protection Act (HOEPA), a loan is classified as a 'high-cost mortgage' if it exceeds certain rate or fee thresholds. Which of the following is a consequence of HOEPA coverage?

Answer: Additional disclosures and restrictions on loan terms are required

HOEPA-covered high-cost mortgages trigger mandatory additional disclosures, restrictions on certain loan terms (e.g., balloon payments, prepayment penalties), and enhanced borrower protections.