Financial Regulation & Supervision Flashcards

What is the primary purpose of the Office of Foreign Assets Control (OFAC)?

Answer: Administering economic and trade sanctions against targeted foreign countries and individuals

OFAC, part of the U.S. Treasury, administers and enforces economic and trade sanctions based on U.S. foreign policy and national security goals.

Under the Equal Credit Opportunity Act (ECOA), lenders are prohibited from discriminating against credit applicants based on:

Answer: Race, color, religion, national origin, sex, marital status, or age

ECOA prohibits discrimination in credit decisions based on protected characteristics including race, color, religion, national origin, sex, marital status, age, and receipt of public assistance.

What does the term 'regulatory arbitrage' refer to in financial supervision?

Answer: Exploiting differences in regulations across jurisdictions or regulatory frameworks to gain advantage

Regulatory arbitrage occurs when firms structure activities to take advantage of less stringent regulations in certain jurisdictions or regulatory categories.

The Consumer Financial Protection Bureau (CFPB) was created by which legislation?

Answer: Dodd-Frank Wall Street Reform and Consumer Protection Act

The CFPB was established by the Dodd-Frank Act of 2010 to consolidate and strengthen consumer financial protection responsibilities.

A bank examiner conducting a CAMELS evaluation rates a bank 'Satisfactory' in the 'M' component. What does 'M' represent?

Answer: Management quality

In the CAMELS framework, 'M' stands for Management quality, which assesses the competence, integrity, and risk management capabilities of the bank's leadership.

Which requirement mandates that financial institutions provide customers with clear disclosures about the terms of deposit accounts under Regulation DD?

Answer: Truth in Savings Act

The Truth in Savings Act, implemented by Regulation DD, requires depository institutions to clearly disclose terms and conditions of deposit accounts including APY, fees, and rate information.

Under the Gramm-Leach-Bliley Act (GLBA), financial institutions must provide customers with a privacy notice explaining:

Answer: What personal information is collected and how it is shared

GLBA requires financial institutions to explain their information-sharing practices and give customers the opportunity to opt out of certain data sharing with non-affiliated third parties.