CRCM Community Reinvestment Act (CRA) Compliance 3

Question 1

What information must a bank's CRA public notice include?

Accepted Answer

Information about the CRA process and how the public may submit comments to the bank and its regulator

Answer

A list of all loan applicants denied credit in the past year

Answer

The bank's internal CRA compliance budget for the current fiscal year

Answer

The names and contact information of examiners who conducted the most recent CRA exam

Question 2

HMDA data is most directly useful during CRA examinations because it:

Accepted Answer

Shows the geographic distribution and borrower demographics of mortgage loan applications and originations

Answer

Provides information on the bank's capital ratios in LMI census tracts

Answer

Documents the bank's CRA rating history over the past decade

Answer

Identifies fraudulent lending activity in underserved communities

Question 3

An intermediate small bank under CRA regulations is evaluated using:

Accepted Answer

A community development test combined with the small bank lending test

Answer

Only the small bank lending test, with no community development component

Answer

The full three-part large bank test covering lending, investment, and service

Answer

A voluntary self-assessment submitted directly to the regulator

Question 4

'Redlining,' as addressed by the CRA, refers to:

Accepted Answer

Refusing or significantly limiting financial services in geographic areas based on the race or ethnicity of residents

Answer

Marking loan files with color codes to indicate risk levels for internal tracking

Answer

Setting interest rates higher for loans in certain zip codes due to lower property values

Answer

Targeting LMI areas with non-traditional or high-cost loan products

Question 5

Under the CRA service test for large banks, examiners evaluate:

Accepted Answer

The accessibility and distribution of retail delivery systems and the range of community development services provided

Answer

Exclusively the bank's mobile banking and online service delivery channels

Answer

The profitability of the bank's retail service network in LMI census tracts

Answer

Whether the bank has met its minimum community development loan targets

Question 6

Which of the following BEST describes a 'community development loan' for CRA purposes?

Accepted Answer

A loan whose primary purpose is community development, such as financing affordable housing or supporting LMI-serving community organizations

Answer

Any loan with an interest rate at or below the current prime rate

Answer

A personal loan made directly to an LMI individual for home improvement

Answer

A loan to any nonprofit organization, regardless of its stated mission

Question 7

What is the most significant regulatory consequence of receiving a 'Substantial Noncompliance' CRA rating?

Accepted Answer

Severe restrictions on regulatory approvals for mergers, acquisitions, and new branch applications

Answer

Automatic revocation of federal deposit insurance within 180 days

Answer

Mandatory criminal referrals to the Department of Justice for bank officers

Answer

Requirement to immediately hire a court-appointed CRA compliance monitor