ABA CRCM Certification Exam Questions with AI Explanations

QUESTION: 29

Safety and soundness concerns in FDIC Payday Lending Guidance clearly mention that there should be adequate capital as Minimum capital requirements are not enough to offset the risks of payday loans. Banks should hold capital against its subprime portfolio in amounts:

That are 1½ to 5 times greater than normal
That are 1½ to 3 times greater than normal
That are 1½ to 3 times lower than normal
That should be between 2-5 in comparison to normal

Answer(s): B

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QUESTION: 30

Compliance issues related to payday lending are all of the following EXCEPT:

Payday lending may adversely affect a bank's CRA rating. Any illegal or questionable practices will negatively affect a bank's CRA performance. A payday lending program may be inconsistent with helping to meet the community's credit needs
The bank (or its third-party partner) must properly disclose all finance charges and fees to payday lending customers. Advertisements of the program are also subject to Truth-in-Lending requirements
Adverse action disclosures must be provided to applicants of payday loans that are denied if a consumer report (including check tracking services) was used in the credit decision
The bank may be subject to the FOC's unfair or deceptive practices rules.

Answer(s): D

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QUESTION: 30

Compliance issues related to payday lending are all of the following EXCEPT:

Payday lending may adversely affect a bank's CRA rating. Any illegal or questionable practices will negatively affect a bank's CRA performance. A payday lending program may be inconsistent with helping to meet the community's credit needs
The bank (or its third-party partner) must properly disclose all finance charges and fees to payday lending customers. Advertisements of the program are also subject to Truth-in-Lending requirements
Adverse action disclosures must be provided to applicants of payday loans that are denied if a consumer report (including check tracking services) was used in the credit decision
The bank may be subject to the FOC's unfair or deceptive practices rules.

Answer(s): D

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QUESTION: 30

Compliance issues related to payday lending are all of the following EXCEPT:

Payday lending may adversely affect a bank's CRA rating. Any illegal or questionable practices will negatively affect a bank's CRA performance. A payday lending program may be inconsistent with helping to meet the community's credit needs
The bank (or its third-party partner) must properly disclose all finance charges and fees to payday lending customers. Advertisements of the program are also subject to Truth-in-Lending requirements
Adverse action disclosures must be provided to applicants of payday loans that are denied if a consumer report (including check tracking services) was used in the credit decision
The bank may be subject to the FOC's unfair or deceptive practices rules.

Answer(s): D

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QUESTION: 31

Which of the following comes under the heading of nontraditional mortgage product risks?

Reduced documentation adds risk to a mortgage loan.Institutions may rely on reduced documentation in the credit underwriting process.Income and credit verification may not be obtained.Use of reduced documentation should be subject to clear policies that require more documentation when the credit risk rises
Reduced documentation adds risk to a mortgage loan.Institutions may rely on reduced documentation in the credit underwriting process.Income and credit verification may not be obtained.Use of reduced documentation should be subject to clear policies that require more documentation when the credit risk rises
Perform due diligence before entering into third-party relationships, including a review of the third party's
General competence
Business practices and operations
Reputation
Financial capacity
Internal controls
Record of compliance with laws
Amounts credited as recovery on a loan must not exceed all principal, finance charges, and fees previously charged off. Amounts that exceed these must be credited as income

Answer(s): A,B

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ABA CERTIFIED REGULATORY COMPLIANCE MANAGER (CRCM) CRCM Dumps in PDF

Free ABA CRCM Real Questions (page: 18)

QUESTION: 29

QUESTION: 30

QUESTION: 30

QUESTION: 30

QUESTION: 31