CBP - Certified Banking Professional Banking Regulations and Compliance Questions and Answers

Question 1

A bank's marketing department plans to launch a social media campaign for a new home equity line of credit (HELOC). The advertisement prominently features an attractive introductory Annual Percentage Rate (APR). According to Regulation Z of the Truth in Lending Act (TILA), which of the following is also required to be included in the advertisement to avoid being misleading?

Accepted Answer

The period the introductory rate is in effect and the APR that will apply after the introductory period.

Answer

Regulation Z (TILA) has specific rules for advertising open-end credit like HELOCs. If an advertisement includes a 'triggering term' such as an introductory APR, it must also clearly and conspicuously disclose additional information to provide the consumer with a complete picture. This includes the duration of the introductory rate and the APR that will be in effect afterward.

Question 2

A small community bank is undergoing a Community Reinvestment Act (CRA) examination. Examiners will assess the bank's performance primarily based on which of the following?

Accepted Answer

How well the bank is meeting the credit needs of its entire community, including low- and moderate-income neighborhoods.

Answer

The Community Reinvestment Act (CRA) was enacted to encourage depository institutions to meet the credit needs of the communities in which they operate, with a particular focus on low- and moderate-income (LMI) neighborhoods. Examiners evaluate a bank's lending, investment, and service performance within its defined assessment areas.

Question 3

Under the Bank Secrecy Act (BSA), a bank must file a Suspicious Activity Report (SAR) in which of the following scenarios?

Accepted Answer

A customer who is a known local business owner frequently makes large, structured cash deposits that are just under the reporting threshold.

Answer

The Bank Secrecy Act requires financial institutions to assist U.S. government agencies in detecting and preventing money laundering. While a cash transaction over $10,000 requires a Currency Transaction Report (CTR), structuring deposits to avoid this threshold is a classic red flag for illegal activity, such as money laundering, and would require the filing of a SAR. The other scenarios are generally considered normal banking activities.

Question 4

Which of the following is a primary requirement of the Gramm-Leach-Bliley Act (GLBA) Safeguards Rule for financial institutions?

Accepted Answer

To develop, implement, and maintain a comprehensive written information security program.

Answer

The GLBA Safeguards Rule specifically requires financial institutions to create and maintain a written information security program to protect the confidentiality and integrity of customer information. This program must include administrative, technical, and physical safeguards.

Question 5

A loan applicant is denied credit based in part on information obtained from a credit report. According to the Fair Credit Reporting Act (FCRA), what must the bank provide to the applicant?

Accepted Answer

An adverse action notice that includes the name of the credit reporting agency that supplied the information.

Answer

When a creditor takes adverse action (like denying credit) based on information from a consumer reporting agency, the FCRA requires them to provide the consumer with an adverse action notice. This notice must include a statement that the credit reporting agency did not make the decision and cannot provide the reasons for it, and it must provide the name, address, and phone number of the agency that furnished the report.

(CBP) Certified Banking Professional Practice Test

(CBP) Certified Banking Professional Practice Test

CBP - Certified Banking Professional Banking Regulations and Compliance Questions and Answers