CRCM Practice | Questions And Answers | 100%
Correct Answers
Which of the following is not exempt from the rules on reasonable and proportional pricing of electronic debit
transactions? ANS A debit card issued by a community bank with $7 billion in assets, affiliated with
another depository institution with assets of $5 billion
Which of the following statements is true regarding debt card interchange fees and routing? ANS An issuer
can meet the requirements of the network exclusivity rule by allowing transactions to be processed on two
unaffiliated payment card networks that don't restrict transactions based on geography, merchant or transaction
type.
In order to qualify for the fraud prevention adjustment an issuer must (debt card interchange fees and routing):
ANS Implement fraud prevention and detection policies
ABC Bank has several customers with hearing disabilities. Of the following, which statement is true? ANS
The bank must reasonably provide auxiliary aids and services to assist in communications with its disabled
customers
Which of the following activities is permitted under ADA? ANS Prohibiting smoking anywhere in the
bank building - The bank cannot discriminate against persons who regularly associate with persons with
disabilities. It also cannot charge for auxiliary devices that are used as a reasonable accommodation. Therefore,
it cannot charge for the readers. The bank may not force a disabled person to use a segregated service, such as
a special teller window. If the disabled person wants to use the regular window, the bank must allow him or her
to do so. The bank may prohibit smoking within the building.
Bank A offers safe deposit services in a vault area that contains a door too narrow for wheelchair passage. The
bank cannot widen the door because of the vault construction. Therefore, when a customer in a wheelchair
needs access to a safe deposit box the customer cannot enter the vault. The bank provides viewing rooms for
all safe deposit customers, and one of these rooms has a door wide enough for a disabled customer to enter.
Which of the following must the bank do to provide safe deposit box service to wheelchair customers? ANS
Bring the safe deposit box to the customer and provide an accessible area where the customer may
privately have access to the contents - The bank must make this service available in a manner that provides
equal benefits. Because a nondisabled person would not have to be accompanied by another individual, the
bank cannot require this of a disabled person. Also, the construction of a new vault is a significantly expensive
undertaking, one that would probably impose an undue burden on the bank. The best alternative is to provide
the disabled person with access to a private location and have bank personnel retrieve and deliver the box.
The mortgage lending department of Bank XYZ received some inquiries from potential applicants who are
visually impaired. The bank would like to comply with ADA concerning these potential applicants, but it does
,not want to spend a significant amount of money. Which of the following statements is true? ANS The
bank may have a loan assistant read each loan application and disclosure document to the applicant and assist
in completion of the forms. - Although the bank may have its documents translated into Braille, it is not
required to do so. The bank cannot require that the applicant bring a nondisabled friend, and it cannot make a
policy that blatantly discriminates against a class of disabled persons.
Bob's wife is HIV-positive due to a blood transfusion during an appendectomy 15 years ago. She is not yet
sick, but takes medication to prevent the onset of AIDS. Bob occasionally needs to take time off from work to
take her for testing at Johns Hopkins in Baltimore. Because of complaints about Bob's exposure to this disease,
employees have asked HR to limit his contact with them and with customers. The bank has asked Bob not to
eat in the lunchroom with the other employees and has placed Bob in a position where he has limited customer
contact. Does this company have any potential ADA liability? ANS Yes. Because the manager has
associated Bob with this disease, the ''associated with'' rule applies
Which of the following employment practices is NOT legal under ADA? ANS Establishing a policy that
prohibits hiring alcoholic applicants - The bank may establish a policy that prohibits hiring applicants (or
permits the firing of employees) who are under the influence of alcohol while at work. Because alcoholism is a
disability, the bank cannot have a policy of refusing to hire such persons. However, the bank may hold the
employee to the same performance standards and rules, (including those against being under the influence of
alcohol at work) as the other employees.
Under the ADA, what can an employer do? ANS Inquire about a disability when offering a job provided
the disability is related to the job requirements - The employer may inquire about a disability that is related to
the job function. If necessary, the employer must provide a reasonable accommodation so that the employee
can perform the necessary job functions.
Mills Company, Inc., is a manufacturing company with a working capital line of credit from First National
Bank. The credit agreement governing the loan states that Mills cannot obtain additional unsecured credit
without the approval of the bank. Mills believes that such a clause violates the Bank Holding Company Act's
anti-tying clause. Does it? ANS No, since this clause relates to the soundness of the credit - Banks may not
extend credit, lease or sell property, furnish services, fix, or vary consideration conditioned on the customer not
obtaining credit or services from a bank competitor unless imposed to assure soundness of the credit.
Roger Jameson is the head of the consumer loan department at First National Bank. He is a regular participant
in a lending committee of a local finance trade association. The committee meets once a month at a local hotel.
After the committee meetings, Roger and several other committee members who are officers at other banks in
town go to a hotel restaurant and talk for a couple of hours before leaving. During these informal conversations
Roger learned that the other members require the car dealerships in town that sell consumer installment
contracts to the banks to refrain from selling them to local savings and loan associations. Roger believes that
this is a good idea and would like to implement it at First National. Is there a problem with doing so? ANS
Yes. Restricting the dealerships is a restraint of trade. - This action could be considered both a restraint of trade
and a conspiracy to restrain trade.
,First National is developing a consumer checking account that can access a line of credit. This is the first time
the bank has ever had such a product, although this type of credit facility has been popular with other banks in
town. To determine what interest rate to charge on this account, an officer of First National called some of his
friends at other local banks offering this type of credit and asked several questions, including the interest rate
charged on this type of account and what internal factors the banks use to set the rate. After obtaining this
information, First National determines that it could charge approximately 2 percent more than it originally
planned. Is there anything wrong with this course of action? ANS Yes. Communicating with competitors
for purposes of setting prices is wrong. - This scenario is an antitrust price-setting problem. The bank is
blatantly attempting to lessen competition by setting prices based on the prices of competitors. The whole
purpose of the antitrust laws is to prevent this type of price setting.
First National Bank owns a data processing company that sells financially related data processing services to
various businesses in the community. Daniel Tyler, a loan officer, is negotiating a loan to a local CPA firm. He
would like to make the loan conditional on the CPA firm's use of the subsidiary data processing firm. May he
do so? ANS No. It is an illegal tie-in. - No loan can be conditioned on the borrower obtaining services
from a bank subsidiary.
Martha Smith of First National Bank is attempting to close a large commercial loan to a manufacturing
equipment company. In negotiating the interest rate on the loan Martha states that if the company will move
some of its demand accounts to the bank, it could get a lower interest rate. Is this wrong? ANS No. The
bank may condition the loan on the customer placing a deposit in the bank. - The bank may condition the
extension of a loan on the customer placing a deposit in the bank. Anti-tying provisions stipulate that banks
may not extend credit, lease or sell property, furnish services, fix, or vary consideration conditioned on the
customer obtaining additional credit or service from the bank other than a loan, discount, deposit, or trust
service.
For which of the following business activities must a bank holding company obtain prior approval of the
Federal Reserve Board? ANS Operating an auto club service
Which of the following activities is NOT a permissible nonbanking activity? ANS Providing general
courier services to the businesses around the bank office - Courier services may only be provided for banking
and other financial records.
Which of the following is NOT a factor considered by the Federal Reserve Board when it evaluates an
application under Regulation Y? ANS The current nonbanking activities of the applicant. The Fed DOES
consider the following: (1) The financial strength of the applicant, (2) The management strength of the
applicant, and (3) The effect of the transaction on competition.
, First National Bancshares, Inc., a bank holding company, filed an application with its Federal Reserve Bank on
March 1 to acquire a subsidiary bank. On March 15 the Federal Reserve Board asked First National for more
information. On April 1 the Federal Reserve Bank received the completed application and accepted it. On April
5 the Federal Reserve Bank notified First National of the April 1 acceptance and referred the application to the
Federal Reserve Board. Under the normal rules, by what date must the Federal Reserve Board act on the
application? ANS June 1. The usual time from acceptance is 60 days. However, with additional
notification, the Federal Reserve Board can extend the time up to 91 days from the date the Federal Reserve
Bank accepted the application.
Which of the following transactions does NOT require prior approval of the Federal Reserve Board? ANS
a. The formation of a bank holding company
b. The acquisition by a bank holding company of a subsidiary
c. The acquisition of 25 percent of voting stock of a bank by another bank, in good faith, in its fiduciary
capacity with no power to vote
d. The acquisition of 25 percent of voting stock of a bank by another bank in its fiduciary capacity for the
benefit of the acquiring bank's employees
C - Choices (a) and (b) clearly require Federal Reserve Board approval. To avoid the necessity of Federal
Reserve Board approval for choice (d), this transaction would have to be for the beneficial interest of parties
other than the acquiring bank's employees, shareholders, or subsidiaries.
First National Bankshares, Inc., a bank holding company, held substantially all of the voting stock of an
equipment manufacturing corporation as collateral for a loan to the owner. On May 15 the borrower defaulted
and on September 1, after proper notice was given, the bank foreclosed its security interest on the stock and
exercised its rights to vote the stock at appropriate times. On December 31 the bank transferred the stock to a
subsidiary corporation, FNB, Inc., to market the stock for sale more effectively. What is the longest time period
that FNB, Inc., can possibly hold the stock? ANS Up to five years from September 1 - Property that is a
DPC acquisition (that is, acquired in connection with a debt previously contracted) can be held for up to two
years. On request the Federal Reserve Board may grant up to three additional one-year extensions of this time
period. Real property or property that can be demonstrated to have the characteristics of real property may be
held for longer time periods. The transfer of property to a subsidiary of the bank holding company does not
extend the time period for which it can be held.
Which of the following is NOT a corporate practice required of bank holding companies? ANS Each bank
subsidiary must file a notice with the Federal Reserve before offering a new product.
ACME national bank plans to acquire Smith Brothers insurance agency and make it an operating subsidiary of
the bank. ACME is considered a well-managed and adequately capitalized bank. What regulatory-related
action must ACME take to obtain the agency? ANS Notify the OCC before completing the sale - The bank
is not well capitalized; therefore, it must give prior notice to the OCC before purchasing the agency.
