STUVIA 2024/2025
1. Social Science
2. Law
3. Civil Law
CFIRS Week 1
Terms in this set (138)
Original
The exercise of Fiduciary Powers by national banks is primarily governed by:
A. state law.
B. 12 CFR 9, Fiduciary Activities of National Banks.
C. Scott, the Law of Trusts.
D. the Board of Governors of the Federal Reserve System.
B. 12 CFR 9, Fiduciary Activities of National Banks.
The OCC's Regulation 12 CFR 9.10 requires that cash be invested (made productive):
A. promptly, which means daily for most institutions
B. down to a balance of $1 to $100
C. excluding income cash unless the governing instrument specifically directs that income cash be
invested.
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D. promptly, down to a balance of $1 to $100.
A. promptly, which means daily for most institutions
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A formal fiduciary relationship is involved when acting as:
A. trustee, provided the bank is the sole trustee.
B. trustee, provided the bank has custody of the assets.
C. trustee, executor, ministerial agent.
D. custodian under the Uniform Gifts to Minors Act.
D. custodian under the Uniform Gifts to Minors Act.
To ascertain if sufficient assets have been pledged by the commercial department to cover fiduciary
funds on deposit with the trustee bank, which of the following should NOT be added to the net
demand deposit account balance at the individual account level?
A. Overdrafts
B. Future deposits
C. Outstanding checks
D. Interest bearing accounts of the trustee bank awaiting investment or distribution.
B. Future deposits
Which of the following is NOT allowed under OCC Regulation 9?
A. A member of the trust administration committee also is on the investment committee.
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B. A member of the trust committee also is on the bank's loan and discount committee.
C. A director/officer who participates significantly in the administration of fiduciary activities serves on
the trust audit committee.
D. A member of the trust administration committee is an officer of a non-affiliated bank
C. A director/officer who participates significantly in the administration of fiduciary activities serves on
the trust audit committee.
Which of the following is a contractual, non-fiduciary relationship?
A. Managing agent
B. Trustee
C. Custodian
D. Executor
C. Custodian
Pursuant to the requirements of 12 CFR 9.9, the Trust Audit Committee of a national bank must
report specifically in writing to the Board of Directors:
A. the number of regulatory violations disclosed by internal/external audits during the audit year.
B. whether fiduciary activities are being administered in accordance with law, 12 CFR 9 and sound
fiduciary principles.
C. the criminal violations disclosed by internal/external audits during the audit year.
D. the results of audits (annual and continuous) including significant actions taken as a result of audit.
D. the results of audits (annual and continuous) including significant actions taken as a result of audit.
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Uniform Laws become effective when which of the following happens?
A. The commissioners publish the law
B. When each state officially adopts the law
C. Three-years after the commissioners publish the law
D. Specified in the language of the law at time of publication
B. When each state officially adopts the law
Uniform Laws are unique in that:
A. they are default type laws and can be amended through the trust agreement.
B. they are uniform in language nation wide.
C. apply only to corporate trustees.
D. not very many of them exist.
A. they are default type laws and can be amended through the trust agreement.
Uniform Law are:
A. uniform nation-wide.
B. uniform regionally.
C. not actually uniform.
D. not amendable once published by the commissioner
C. not actually uniform.
Under Regulation 12 CFR 9, a bank administering a Common Trust Fund shall prepare a financial
report based on an audit of the fund:
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A. on request of the participants.
B. quarterly.
C. at least every 6 months.
D. at least every 12 months
D. at least every 12 months
The most crucial, high risk aspect of administering a collective investment fund is:
A. maintaining tax exemption.
B. keeping the written plan up to date with the regulatory authorities.
C. admissions and withdrawals.
D. asset valuation, quality of portfolio.
D. asset valuation, quality of portfolio.
Per requirements of 12 CFR 9.18, collective investment funds must be valued at least:
A. quarterly.
B. quarterly, except for real estate (a)(2) funds.
C. annually, unless otherwise dictated by the written plan.
D. each time admissions and withdrawals are made.
B. quarterly, except for real estate (a)(2) funds.
Regulations of the Comptroller of the Currency prohibits a national bank from holding its own stock in
trust accounts for which it exercises investment discretion unless:
A. the stock was received in kind as a trust asset and the governing instrument contains general
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authority to retain inventoried assets.
B. the beneficiary, in writing, specifically requests the purchase and retention of own bank stock.
C. local law contains a general power of retention for inventoried assets.
D. bank stock is authorized as long as its holding would otherwise be prudent.
A. the stock was received in kind as a trust asset and the governing instrument contains general
authority to retain inventoried assets.
A bank fiduciary may rely on beneficiary approval to engage in self-dealing transactions provided:
A. at a minimum, the bank obtains the approval of all vested beneficiaries and disclosure of all facts
of the transaction are well documented in writing.
B. all beneficiaries are sui juris.
C. such approvals are specifically authorized by terms of the governing instrument and/or local law.
D. all beneficiaries are represented including guardians ad litem appointed to represent minor,
incompetent, or unborn beneficiaries.
D. all beneficiaries are represented including guardians ad litem appointed to represent minor,
incompetent, or unborn beneficiaries.
A corporate trustee may purchase its own bank stock in a fiduciary account if:
A. it is in the best interests of account beneficiaries to do so.
B. the trustor is also a director of the bank and suggests it, even though the trust agreement is silent
on such investments.
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