American Bankers Association CRCM Exam Questions Instant Access

Question 1

Which of the following is true regarding extensions of credit to executive officers, directors, and principal shareholders?

AMust be approved in advance by the board of directors if the aggregate credit is more than the greater of either $25,000 or 5 percent of the bank's capital and surplus, not exceeding $500,000

BMust be approved in advance by the board of directors if the credit is greater than $50,000 or 5 percent of the bank's capital and surplus

CMay not exceed $100,000 in the aggregate, regardless of approvals

DMay not exceed $250,000 in the aggregate, regardless of approvals

Answer : A

Question 2

____________ is any company of which the bank is a subsidiary or any other subsidiary of the same company of which the bank is a subsidiary.

ABrokerage House

BTreasury

CFDIC

DAffiliates

Answer : D

Question 3

Margin stock includes:

AEquity securities registered or having delisted trading privileges on a national securities exchange:

BOver-the-counter (OTC) securities that do not qualify for trading in the National Market System

CWarrants or rights to subscribe to or purchase a common stock

DSecurities issued by a investment company registered under the Investment Company Act, except for:
A company licensed under the Small Business Investment Company Act
A company that has at least 95 percent of its assets continuously invested in exempted securities; or
A company that issues face-amount certificates; or
A company that is considered a money market fund under the SEC Rules

Answer : D

Question 4

In which of the following situations is the bank NOT required to report lost or stolen securities?

AWhen bonds were expected to be delivered in person from the local Federal Reserve Bank and were not received

BWhen stock traded on the over-the-counter exchange (OTC) was expected to be received through the mail from a customer's broker

CWhen securities with no CUSIP numbers were expected from another financial institution

DWhen stock traded on the New York Stock Exchange (NYSE) was expected to be delivered by the issuer's agent

Answer : C

Question 5

Trust Co. and First National Bank are located in the same city and each has assets of over $20 million. The president of First National has been asked to serve as a director of Trust Co. First National has no trust department and no trust operations. Trust Co. operates solely as a trust company. Would this relationship violate the prohibitions against management official interlocks in Regulation L?

AYes, because the institutions are in the same city.

BNo, because the institutions are not both depository institutions.

CNo, because the institutions do not compete.

DMaybe, but it depends on the size of the institutions.

Answer : A

Question 6

If the lender is subject to the mortgage interest reporting requirement, which of the following actions is NOT required?

AThe lender must file an information return with the IRS.

BThe lender must report the amount of interest and points on the information return.

CThe lender must report the loan balance as of December 31 of the year preceding the year the report is filed.

DThe lender must send a statement to the borrower.

Answer : C

Question 7

How is the maximum loan value of margin stock defined?

AAs a percentage of the amount to be loaned

BAs a percentage of the book value of the stock

CAs a percentage of the current market value of the stock

DAs a percentage of the good-faith loan value of the stock

Answer : C

American Bankers Association Certified Regulatory Compliance Manager CRCM Exam Questions