CRB Financial Regulations & Compliance 4

Question 1

Which provision of the USA PATRIOT Act requires banks to have a formal Customer Identification Program (CIP)?

Accepted Answer

Section 326

Answer

Section 326 of the USA PATRIOT Act requires financial institutions to implement a Customer Identification Program to verify the identity of account holders.

Question 2

A retail bank teller notices a customer regularly exchanges small bills for large bills without any apparent business reason. This is most likely an indicator of:

Accepted Answer

Money laundering — placement stage

Answer

Exchanging small bills for large denominations without business purpose is a common indicator of the placement stage of money laundering.

Question 3

Under Dodd-Frank's Volcker Rule, what are banks primarily prohibited from doing?

Accepted Answer

Proprietary trading and owning hedge funds

Answer

The Volcker Rule prohibits bank holding companies from engaging in proprietary trading or owning, investing in, or sponsoring hedge funds or private equity funds.

Question 4

How long must banks generally retain records related to the Bank Secrecy Act, such as CTRs and SARs?

Accepted Answer

5 years

Answer

The BSA requires financial institutions to retain records, including CTRs and SARs, for a minimum of five years.

Question 5

The Home Mortgage Disclosure Act (HMDA) requires lenders to collect and report data primarily to:

Accepted Answer

Detect and deter discriminatory lending patterns

Answer

HMDA data allows regulators and the public to identify potential discriminatory lending patterns and ensure lenders serve their communities fairly.

(CRB) Certified Retail Banker Practice Test

(CRB) Certified Retail Banker Practice Test

CRB Financial Regulations & Compliance 4