Question 1

First National Bank is a wholly owned subsidiary of Bank Holding Company, Inc.Which of the following companies is NOT an affiliate of First National Bank?

Options :

A : A company that owns 60 percent of Bank Holding Company, Inc.

B : A company of which First National owns 100 percent of the stock, set up solely to hold the title to the First National Bank building

C : A company established to sell securities and that is 100 percent owned by Bank Holding Company, Inc.

D : Another bank that is owned by Bank Holding Company, Inc.

Answer: B

Question 2

Which of the following is NOT a requirement of CRA?

Options :

A : To delineate the bank’s assessment area(s)

B : To collect loan data

C : To approve the bank’s CRA statement at an annual board meeting

D : To report small business loan data

Answer: C

Question 3

Your bank’s president comes back from an industry conference and tells the compliance officer thatshe attended a presentation about OFAC. She heard the bank could be fined for not adhering to OFACrequirements. Thus, she has directed that every bank transaction be reviewed for OFAC compliance.What is the most appropriate statement the compliance officer could make to the bank president?

Options :

A : The bank is already in compliance because OFAC checks are performed on all new depositors

B : The bank has assessed its OFAC risk and has implemented risk-based OFAC procedures

C : OFAC does not apply because the bank does not conduct business in foreign countries or with foreign nationals

D : Banks are usually not fined for OFAC violations unless they conduct transactions with SDNs or blocked countries

Answer: B

Question 4

First National Bank is attempting to determine which of the following customers would qualify asexempt persons:• Nationwide Foods, Inc , is a national company with stock listed on the New York Stock Exchange• National Paper Products, is a wholly owned subsidiary of Nationwide Foods, Inc• Products Incorporated, a depositor for three months, is a regional company whose stock isdesignated a NASDAQ Capital Markets Company and that sells and leases large boats• Century Enterprises, a local company owning several local restaurants, is a longtime bank customerand frequently makes deposits in excess of $10,000. All of Century’s stock is owned by a local family.Which of these customers would qualify as an exempt person?

Options :

A : All except for Nationwide Foods, Inc

B : All except for National Paper Products

C : All except for Century Enterprises

D : All except for Products Incorporated

Answer: D

Question 5

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

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