Deposit Compliance and Regulatory Examinations Flashcards

The 'four Ps' framework sometimes used in compliance examinations refers to:

Answer: Policies, processes, procedures, and practices (or people)

The 'four Ps' framework refers to policies, processes, procedures, and practices (sometimes people), which together define a bank's compliance management approach.

Under Regulation CC, a bank may extend holds on deposited checks for 'new accounts' defined as accounts open less than:

Answer: 90 days

Regulation CC defines a 'new account' as one that has been open for 30 calendar days or less, during which exception hold rules may apply.

Which of the following best describes the role of a bank's compliance audit function?

Answer: It provides independent testing to verify that the compliance program is working effectively

The compliance audit function independently tests and assesses whether the bank's compliance controls and program are working as intended.

Under the Flood Disaster Protection Act, a lender that fails to require flood insurance when required must:

Answer: Force-place the flood insurance and charge the premium to the borrower

If a lender determines flood insurance is required but not maintained, the lender must force-place insurance and may charge the cost to the borrower.

A bank's 'compliance risk appetite' statement describes:

Answer: The level and type of compliance risk the board is willing to accept in pursuit of its strategy

A compliance risk appetite statement formally documents the board's tolerance for compliance risk, guiding resource allocation and strategic decisions.

Under 12 CFR Part 30 (OCC Safety and Soundness Standards), banks are required to maintain:

Answer: A compliance management system sufficient to ensure compliance with applicable laws and regulations

OCC safety and soundness standards require national banks to have compliance management systems adequate to identify, manage, and control compliance risks.