Question 1

Which of the following interest-bearing accounts is EXEMPT from Form 1099 annual information reporting requirements under IRS regulations?

Options :

A : Time certificates of deposit

B : Money market deposit accounts

C : Individual retirement accounts

D : Negotiable order of withdrawal accounts

Answer: C

Question 2

The Fair Credit Reporting Act (FCRA) became effective in 1971. The purpose of FCRA is to regulate:

Options :

A : The consumer credit reporting and related industries to ensure that consumer information is reported in an accurate manner

B : The consumer credit reporting and related industries to ensure that consumer information is reported in a timely manner

C : The consumer credit reporting and related industries to ensure that consumer information is reported in an accurate, timely, and complete manner

D : None of these

Answer: C

Question 3

Which of the following is the best method for a large bank to use in monitoring its CRA performance?

Options :

A : Review the effectiveness of marketing materials.

B : Evaluate approval and denial rates for minority loan applicants.

C : Perform a quarterly evaluation of the bank’s loans-to-deposits ratio.

D : Perform a geographic analysis of lending levels and dispersion of loans.

Answer: D

Question 4

Which one of the following is out of the FIRREA penalties included in the enforcement section of Adjusted Mortgage Regulation (12 CFR 34)?

Options :

A : Penalties up to $7,500 per day for violations of laws and regulations

B : Penalties up to $47,500 per day if violations or unsafe or unsound practices are engaged in recklessly or are part of a pattern of misconduct that causes more than a minimal loss to the bank or any pecuniary gain to the parties involved

C : Penalties up to $1,375,000 per day against persons who knowingly commit a violation and knowingly or recklessly cause a substantial loss to the bank or a substantial benefit to the party

D : Penalties up to $6,500 per day for violations of laws and regulations

Answer: A,C

Question 5

Examples of unfair practices mentioned in guidelines against Predatory and Abusive Lending includes loan flipping and loan equity stripping. It is said that:

Options :

A : Loan flipping may be unfair because it increases the chances of foreclosure by decreasing home equity and increasing debt burden

B : Equity stripping is the practice of making loans secured by the consumer’s home but with high, upfront fees that are financed and secured by the home

C : Loan flipping is the practice of making loans secured by the consumer’s home but with high, upfront fees that are financed and secured by the home

D : Equity stripping may be unfair because it increases the chances of foreclosure by decreasing home equity and increasing debt burden

Answer: A,B

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