Certified Regulatory Compliance Manager (CRCM) Sample Questions
One of the most prominent and well recognised credentials for banking compliance professionals is the Certified Regulatory Compliance Manager (CRCM) credential. The certification is treated with great respect and importance due to the fact that earning this prestigious degree can be quite difficult. The certification’s perceived difficulty level is said to be related to experience requirements, thorough and organised subject knowledge, passing the real test, and maintaining the certification. Many of the top compliance experts and consultants already possess this highly regarded qualification.
Q1)Professionals in compliance risk management must create a framework to make sure that bank management is aware of the risks and what needs to be done to reduce them. The many roles that compliance experts play include risk management components like:
- A. Coordinating regulatory exams to explain risks to examiners
- B. Overseeing compliance training targeting higher risk areas
- C. Tracking regulatory proposals and final rules to understand new risks
- D. All of these
Correct Answer: D
Q2) Additionally, they support the idea of risk-based compliance management. It also defines their expectations that a bank’s programme be risk based. They expect compliance management to be adapted to the bank, be it large or small, offering conventional or speciality financial services, simple or complicated product lines, and adjusted as suitable for the customer base. Who are they?
- A. Outsourcing firms
- B. Foreign financial service providers
- C. Bank regulatory agencies
- D. Risk management organizations
Correct Answer: C
Q3) All of the following are duties of a compliance professional EXCEPT:
- A. Recognizing the operating environment and risk tolerance of the business unit
- B. Conducting risk analyses with the aid of the business units to identify the present risk levels and risks related to the bank’s products, business lines, clients, and locations, among other things.
- C. Collaborating with business units to ensure that any faults are quickly corrected
- D. Assisting business lines with, if necessary, personnel compliance training.
Correct Answer: D
Q4) The delivery of an Adverse Action Notice when an application is rejected is an example of how tactical compliance processes should be incorporated into business line operations in a compliance programme. In this instance:
- A. Regulations should be applied consistently to procedures throughout the bank
- B. Revisions to procedures should be based on compliance expertise and not mere editing
- C. Providing solutions to mitigate any identified risk
- D. Assisting business units in developing or revising policies and procedures to reflect current regulatory requirements
Correct Answer: AB
Q5) Which of the following should compliance professionals do while researching and interpreting rules in order to reduce compliance risk?
- A.Follow-up on regulatory initiatives
- B. Applying final regulatory regulations
- C. Recognizing the operating environment and risk tolerance of the business units
- D. grading solutions according to their risk: high, moderate, low
Correct Answer: ABD
Q6)The compliance programme should include strategies for confirming conformity with relevant rules by:
- A. Constant programme evaluation, self-monitoring, and remedial action
- B. Regular reviews
- C. Self-monitoring
- D. Periodic reviews, self-monitoring, and ongoing programme evaluation
Correct Answer: A
Q7) The documentation of compliance risk does not use a standard form. A risk assessment tailored to each institution’s risk profile should be created. The parts that are frequently utilised in the sector are as follows, EXCEPT:
- A. Risk assessment
- B. Measuring key risk indicators
- C. Identifying key performance indicators
- D. Training the leadership of compliance regulation program
Correct Answer: D
Q8) Key performance indicators in compliance regulation and risk assessment typically include:
- A. Fines or penalties
- B. Customer complaints
- C. Regulatory criticism from a regulator or internal or external auditors
- D. None of these
Correct Answer: ABC
Q9) Which of the following should compliance experts use to inform senior management and the board on the status of compliance inside the bank?
- A. Results of self-audits and self-monitoring
- B. Active compliance controls
- C. Timely and correct regulatory reporting
- D. All of the aforementioned possibilities
Correct Answer: D
Q10) A drive to create a unified ARM regulation among the federal supervisory authorities started in the middle of the 1980s. The Federal Reserve Board amended a regulation in 1988 to include the consistent ARM disclosure requirements. As a result, this revised law now contains the majority of the original OCC ARM requirements for consumer protection. National bank ARM loans may be subject to the OCC’s ARM rule, the requirements of this new regulation, or both for adjustable rate mortgage loans. This fresh rule is:
- A. Regulation Z
- B. Truth in Lending
- C. CFR 34.21, 34.22 and 34.23
- D. FIRREA penalty
Correct Answer: AB
Q11) Which of the following FIRREA fines is listed in the Adjusted Mortgage Regulation’s (12 CFR 34) enforcement section?
- A. Sanctions for breaking rules and regulations up to $7,500 per day
- B. If violations or hazardous or unsound procedures are practised recklessly or as part of a pattern of misconduct that results in more than a small loss to the bank or any financial gain to the persons involved, penalties of up to $47,500 per day may be imposed.
- C. Fines of up to $1,375,000 per day against those who violate the law and recklessly or deliberately cause the bank to suffer a significant loss or the party to gain a significant benefit.
- D. Fines of up to $6,500 per day for breaking the law.
Correct Answer: AC
Q12) For loans covered by both the OCC ARM rule and Regulation Z, defined in 12 CFR 226.19(b) as loans issued to an individual for personal use, secured by the borrower’s principal residence, and having a period longer than one year, the index to which the interest rate is related must be:
- A. Listed in loan paperwork
- B. Easily accessible to and verifiable by browser
- C. Multiple values of a chosen measure or a moving average of the chosen measure calculated over a predetermined period
- D. Only A and B
Correct Answer: D
Q13) To warn depository institutions about the dangers of backing non-depository lenders who engage in predatory lending, the banking agencies released two guidelines. Abuseful and predatory behaviours include in Certified Regulatory Compliance Manager:
- A. Pushy salespeople
- B. Excessive fees and interest rates, especially those for superfluous products
- C. Hypothetical payments that might never result in foreclosures
- D. Excessive refinancing where the new loan includes fees
Correct Answer: AB
Q14) Interagency Guidance on Subprime Lending, published in 1999, requires that lending policies in Certified Regulatory Compliance Manager:
- A. Be relevant to the operation’s size and complexity
- B. Address the sorts of offered products and those that are not approved
- C. Demand credit file documentation
- D.All of these.
Correct Answer: D
Q15) All of the following, EXCEPT: are covered under the AL-2003-2 rules for national banks to guard against predatory and abusive lending practises in Certified Regulatory Compliance Manager.
- A. Give national banks examples of potentially harmful practises
- B. Offer advice to banks on how to stay away from unethical behaviour
- C. When assessing these assets, banks should take into account suitable discount rates, credit loss rates, and prepayment rates.
- D. Demonstrate how some abusive lending practises may involve unethical or deceptive conduct, in violation of the Federal Trade Commission Act.
Correct Answer: C
Q16) Which of the following typically qualifies as abusive lending?
- A. Various lending methods are typically used to describe abusive lending.
- B. Excessive and concealed costs in the amount loaned.
- C. Aggressive credit marketing to potential borrowers who are unable to repay it on the terms supplied is a core trait.
- D. Such loans are typically underwritten based on the liquidation value of the collateral rather than the borrower’s creditworthiness.
Correct Answer: ACD
Q17) According to AL-2003-“Guidelines 2’s for National Banks to Guard against Predatory and Abusive Lending Practices,” avoiding the following types of loans can help against buying abusive mortgage loans: EXCEPT:
- A. Loans where the lender did not properly assess the borrower’s capacity to pay back the debt
- B. Loans covered under the Act Protecting Home Owners’ Equity (HOEPA)
- C. Loans with points and fees that are more than 5% of the loan’s total amount, unless the higher amount was charged to keep the loan from becoming unprofitable.
- D. Loans where the amount borrowed included a prepaid multiple-premium credit insurance policy
Correct Answer: D
Q18) Predatory lending practises may have a negative impact on:
- A. A bank’s CRA rating
- B. Equity shipping
- C. Loan quality control reviews
- D. Truth in Lending Act
Correct Answer: A
Q19) Avoiding Predatory and Abusive Lending Practices in Brokered and Purchased Loans- AL-2003-advice 3’s is intended to:
- A. Implement reputable credit underwriting guidelines
- B. Make national banks aware of the dangers they run when they buy loans with predatory or abusive terms or practises or make loans through brokers.
- C. Implement policies that address the conditions in which the bank might issue loans with characteristics linked to unfair lending practises.
- D. Make loans with hefty upfront fees that are financed by the consumer’s home and secured by the property.
Correct Answer: B
Q20) The FDIC Payday Lending Guidance makes it abundantly obvious that enough capital is required since the minimum capital requirements are insufficient to cover the risks associated with payday loans. Banks should hold the following amounts of capital against their subprime portfolio:
- A. That are 1½ to 5 times greater than normal
- B. That are 1½ to 3 times greater than normal
- C. That are 1½ to 3 times lower than normal
- D. That should be between 2-5 in comparison to normal
Correct Answer: B
