Deposit Compliance and Regulatory Examinations Flashcards

During a compliance examination, a 'Matters Requiring Attention' (MRA) citation indicates:

Answer: A deficiency that requires corrective action but is not yet an unsafe or unsound practice

An MRA is a supervisory finding that identifies a practice or condition requiring corrective action before it becomes an unsafe or unsound practice.

A bank's compliance management system (CMS) is evaluated during examinations on which key components?

Answer: Board and management oversight, compliance program, response to consumer complaints, and compliance audit

Examiners assess a bank's CMS based on board/management oversight, the compliance program's design and implementation, complaint management, and internal audit.

Under Regulation O, which types of loans require prior board of directors approval?

Answer: Extensions of credit to executive officers, directors, and principal shareholders above certain thresholds

Regulation O requires board approval for extensions of credit to insiders (executive officers, directors, principal shareholders) that exceed specific thresholds.

Under interagency CRA examination procedures, a bank with assets between $376 million and $1.564 billion is evaluated under:

Answer: The intermediate small bank CRA test (lending + community development)

Intermediate small banks are evaluated under the lending test and the community development test rather than the full three-part large bank test.

A 'Consent Order' issued by a bank regulator is:

Answer: A legally binding agreement requiring specific corrective actions and subject to court enforcement

A consent order is a formal, legally binding enforcement action requiring the bank to take specified corrective steps and subject to potential court enforcement if violated.

Under Regulation W, transactions between a bank and its affiliates are restricted primarily to prevent:

Answer: The affiliate from using the bank to fund itself at preferential terms at depositor expense

Regulation W (implementing Sections 23A and 23B of the Federal Reserve Act) prevents affiliates from using a bank's insured deposits to fund their own operations on favorable terms.