Free Certified Regulatory Compliance Manager (IFPUG) Questions and Answers — Questions and Answers
Question 1: What deadline has the federal agency that oversees financial institutions set for the submission of their loan application registers?
- March 31 of the year following the calendar year for which the data were compiled
- February 1 of the year following the calendar year for which the data were compiled
- March 1 of the year following the calendar year for which the data were compiled (Correct answer)
- April 1 of the year following the calendar year for which the data were compiled
Correct answer: March 1 of the year following the calendar year for which the data were compiled
Financial institutions must submit their loan application registers to their federal supervisory agency by March 1 of the year following the calendar year for which the data were compiled.
Question 2: Which of the following will boost a cash transaction-based anti-money laundering program the MOST?
- Complete SAR worksheets on all cash transactions of $5,000 or more
- Complete CTR worksheets on all cash transactions of $5,000 or more
- Monitor cash transactions of less than $10,000 for suspicious patterns (Correct answer)
- Review all deposits of $25,000 or more
Correct answer: Monitor cash transactions of less than $10,000 for suspicious patterns
Monitoring cash transactions of less than $10,000 for suspicious patterns is the most effective measure in strengthening an anti-money laundering program involving cash transactions.
Question 3: The Main Street branch manager calls and shares the following details: On Tuesday at ten o'clock, Steve bought a cashier's check for one thousand dollars. When Mr. Steve returned at 11:30 a.m., he bought a cashier's check for $2,500 in cash and deposited the traveler's checks into his bank account. Mr. Steve returned at 4:00, putting $8,000 in cash into his bank account. Since this deposit was made after regular banking hours, Wednesday's business date was used to record it. What steps ought the bank to take?
- Record the $1,000 and $2,500 transactions on the bank's monetary instrument sales log because the total exceeds the $3,000 threshold (Correct answer)
- None, because no single cash transaction exceeded $10,000
- Record the $1,000, $2,500, and $9,000 transactions on the bank's monetary instrument sales log because the total exceeds the $3,000 threshold
- File a Currency Transaction Report (CTR) for $11,500
Correct answer: Record the $1,000 and $2,500 transactions on the bank's monetary instrument sales log because the total exceeds the $3,000 threshold
The bank should record the $1,000 and $2,500 transactions on the bank's monetary instrument sales log because the total exceeds the $3,000 threshold.
Question 4: According to federal rules, special-purpose credit is defined as follows:
- A special-purpose credit program may require members to share a particular attribute (such as race or sex), provided the condition was not made to circumvent the ECOA's standards. Special-purpose credit programs may not discriminate on any forbidden grounds. The bank may gather data on that attribute if the participants must provide it to assess eligibility. (Correct answer)
- Any credit assistance program offered by a not-for-profit organization for the benefit of its members or for the benefit of an economically disadvantaged class of person. (Correct answer)
- If the program includes financial need as a criterion, the creditor can never request and consider information regarding the applicant
- Any credit assistance program authorized by federal or state law for the benefit of an economically disadvantaged class of persons (Correct answer)
Correct answer: A special-purpose credit program may require members to share a particular attribute (such as race or sex), provided the condition was not made to circumvent the ECOA's standards. Special-purpose credit programs may not discriminate on any forbidden grounds. The bank may gather data on that attribute if the participants must provide it to assess eligibility.
This answer is correct because the ECOA permits special-purpose credit programs that target a shared characteristic (such as race or sex) as long as the program is not designed to evade ECOA's protections and does not discriminate on prohibited grounds. It also correctly notes the creditor may collect that characteristic when applicants must supply it to determine eligibility. The wrong option is false because such programs are specifically allowed to request and consider applicant information when financial need is a criterion.
Question 5: For creating a deposit account, a bank gave a customer a gift with a fair market value of $25. Which of the following best sums up the gift's legal reporting status?
- If the cost of the gift is under $20.00, it is not reportable to the IRS.
- The fair market value of the gift is reported to the customer on the periodic statement.
- The fair market value of the gift is added to the interest paid and reported on Form 1099-INT. (Correct answer)
- The cost of the gift is credited to the customer's account as a bonus, increasing the account balance.
Correct answer: The fair market value of the gift is added to the interest paid and reported on Form 1099-INT.
The proper reporting status of the gift given to the customer for opening a deposit account is that the fair market value of the gift is added to the interest paid and reported on Form 1099-INT.
Question 6: Which of the following loans is a loan for which First Savings Bank is exempt from submitting a 1098-E (Student Loan Interest) report?
- A $12,000 loan to Paul and Rhonda Pena and their daughter Jennifer, used to pay her college tuition as well as the tuition at the private high school her sister, Jeanne, attends (Correct answer)
- A $35,000 line of credit made to Don and Barbara Cocelli, secured by their home, for the payment of certified school expenses for their twin daughters at an accredited private school
- A $10,000 tuition loan made to Bobby Wilcox, a student at the state university, guaranteed by the Department of Education
- A $15,000 loan to Linda Chu to be used for the purpose of paying tuition and fees and purchasing college books, lab equipment, and a computer for use in her education at the local community college
Correct answer: A $12,000 loan to Paul and Rhonda Pena and their daughter Jennifer, used to pay her college tuition as well as the tuition at the private high school her sister, Jeanne, attends
First Savings Bank does not have to provide a 1098-E (Student Loan Interest) report for the loan described in the scenario: a $12,000 loan to Paul and Rhonda Pena and their daughter Jennifer, used to pay her college tuition as well as the tuition at the private high school her sister, Jeanne, attends.
Question 7: Which of the following categories of workers needs to get instruction on how to utilize W-9 forms precisely?
- Senior Management
- Security officers
- New account officers (Correct answer)
- Auditors and accountants
Correct answer: New account officers
W-9 forms are used to collect taxpayer identification information from individuals or entities that may be subject to certain reporting requirements, such as providing payments or income to them. The purpose of the W-9 form is to obtain the recipient's correct taxpayer identification number (TIN) and other relevant information for tax reporting purposes.
Free Certified Regulatory Compliance Manager (IFPUG) Questions and Answers
What deadline has the federal agency that oversees financial institutions set for the submission of their loan application registers?