Question 1

James Walker DBA Walker Enterprises has been a customer of the bank for one month. The company told the bank that it would regularly make deposits in excess of $10,000 because it operates several laundromats in the city. The bank performed a background check on the company before opening the account. For its first 30 days, the company made 12 large cash deposits. Can the bank exempt this company now? Why or why not?

Options :

A : No. It is a not a corporation, but a sole proprietorship.

B : No. It has not maintained an account at the bank for 12 months.

C : No. It operates an ineligible business.

D : Yes. The bank conducted due diligence on the customer to determine that it had legitimate largecash transactions.

Answer: D

Question 2

Which of the following is an accurate statement according to the requirements of the customer identification program regulations?

Options :

A : A bank must always require documentary verification of a customer’s identification

B : A bank may waive any part of the CIP requirements if senior management approves the waiver and there is a good cause

C : A physical address or a post office box is acceptable for any new customer

D : The bank’s CIP program must enable it to form a reasonable belief about the identity of the person

Answer: D

Question 3

Credit scoring systems:

Options :

A : Evaluate an applicant’s creditworthiness mechanically, based on key attributes of the applicant and aspects of the transaction, and determine, alone or in conjunction with an evaluation of additional information about the applicant, whether an applicant is deemed creditworthy

B : Are evaluated by regulatory agencies to determine whether they are empirically derived and statistically sound and to examine: The bank’s policies on the use of the credit scoring system Training of bank employees on the use of the system The number of high-side and low-side overrides of the system

C : Both of these

D : None of these

Answer: C

Question 4

______________ should include basic elements designed to understand and mitigate risk. It usually includes: Written program Compliance-related policies and procedures

Options :

A : Tactical Compliance procedure

B : Rank solution

C : Compliance program

D : None of these

Answer: C

Question 5

It means a direction by the consumer that the financial institution not discloses nonpublic personal information about the consumer to a non-affiliated third party, except as permitted by the regulation. What is it?

Options :

A : Opt-out

B : Re-disclosure

C : Non-affiliated

D : Both B and C

Answer: A

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