CRCM

CRCM practice questions, page 12 of 19, with answer review and explanations.

Question 56

Regulation O both restricts lending to insiders and requires that certain loans to insiders be disclosed. Each banking agency has adopted the provisions of Regulation O for administrative enforcement purposes. These were not found to be useful in preventing insider lending abuse. Regulation O governs which of the following areas major areas:

  1. Lending to insiders
  2. Disclosures of loans made to insiders
  3. Both of these
  4. None of these

Question 57

Unless excluded by a board resolution or the bylaws, the following officers will be considered to be executive officers EXCEPT:

  1. Chairman of the board
  2. President
  3. Each vice-president and above (for example, senior vice-president, executive vice-president, and so on)
  4. Brokerage house's vice president

Question 58

____________ is any company of which the bank is a subsidiary or any other subsidiary of the same company of which the bank is a subsidiary.

  1. Brokerage House
  2. Treasury
  3. FDIC
  4. Affiliates

Question 59

It is an extension of credit will be deemed to be made to an insider if the proceeds are transferred to the insider or used for the insider's benefit. This rule does not apply if the credit is made on substantially the same terms and conditions as those made to a noninsider and if the proceeds are used in a bona fide transaction involving the acquisition of property, goods, or services from the insider. What is it?

  1. Tangible economic benefit rule012 CFR 215.3(f)
  2. Extension of credit-12 CFR 215.3
  3. Lending restrictions
  4. Intangible economic-benefit rule

Question 60

Lending restrictions under requirements 12 CFR 215; 12 CFR 337, 12 CFR 349 are all of the following EXCEPT:

  1. Banks may not lend to executive officers, directors, principal shareholders, or any of their related interests unless the credit is made on substantially the same terms and following credit underwriting standards that are not less stringent than those on loans to persons who are not insiders; however, if the bank has a benefit program widely available to its employees, it may lend to insiders on the same terms and conditions as it lends to its other employees, pursuant to its employee benefit program
  2. Banks may not lend to any executive officer, director, or principal shareholder, and to any of their related interests, amounts that exceed the higher of $25,000 or 5 percent of the bank's capital and unimpaired surplus (up to a maximum of $500,000) in the aggregate unless The credit is approved in advance by the board of directors The interested party has abstained from voting
  3. Prior approval is not needed for each draw against a line of credit provided the line of credit was approved within the preceding 14 months, based on the then- current financial statement
  4. None of these