CRCM questions well answered already
passed 2026/2027
Legislation was recently enacted to reform consumer real estate protection laws, and the bank will now
have to change tl1e way it documents, discloses, and advertises real estate loans, an integral product
line at your bank. What should the compliance professional do FIRST to implement the new law within
the bank?
a. Read the law and write a new real estate compliance policy
b. Form a task force of the business unit managers whose departments will be affected by the law to
collectively form an action plan
c. Talk to the bank president about the need for more resources in compliance
d. Sign up all bank personnel affected by the changes for a seminar on the new law - Correct
answer✅✅ B
A bank's president would like to begin offering a new home equity line of credit product within ///Jo
weeks. In all cases the bottO\ver's principal dwelling will secure the loan. The president has already
launched a planned advertising campaign for the bank's major service markets. what should the
compliance professional do FIRST?
a. Hire an attorney to write the appropriate legal documents and disclosures
b. Write a memo to the president explaining why the compliance professional should have been in on
the process at an earlier date
c. Begin training sessions for the lending and loan operations staff on the compliance issues involved
d. Perform a risk assessment to determine the bank's level of risk in offering this new product - Correct
answer✅✅ D
A bank has a large mortgage department as well as a high HMDA error rate. An expensive software
program could automate the process, but the business unit manager does not want to purchase the
software because of its expense. Though it is not as efficient, the manager prefers to make some
improvements to tl1e manual process, add some more robust monitoring procedures, and opt not to
purchase the software. What should the compliance professional do?
a. Elevate the issue to a higher authority to force the mortgage department unit to purchase tl1e
software
b. Nothing; the compliance professional's job is done ,with the completed research
,c. Document the fact that the level of risk present with manual systems is acceptable to the mortgage
department business unit
d. Write a memo to the president of the bank that explains the risk assessment for this area - Correct
answer✅✅ C
The federal banking agencies have proposed an amendment to Regulation Z that would require a new
early disclosure statement for loans secured by the borrower's principal dwelling. After reading the
proposed change, what should the compliance professional do FIRST?
a. Establish a task force to study the proposed rule.
b. Contact the bank's platform software vendor to determine whether it will be ready for the change
c. Prepare a summary document that outlines the effects the proposed rule would have on the bank's
operations
d. Train bank staff on the new rule - Correct answer✅✅ C
During a recent compliance examination, regulatory examiners found that the bank was not conducting
flood hazard area determinations before closing on construction loans. The compliance professional has
reviewed the files and agreed with the examiners' finding. What should be done FIRST?
a. Review the bank's flood policies and procedures to determine where the compliance failure occurred
b. Conduct a risk assessment of the flood determination requirement on construction loans
c. Prepare an analysis for bank management explaining the requirement
d. Review all construction loan files to determine the extent of the problem - Correct answer✅✅ A
1. During a recent compliance examination, regulators cited the bank for violations of various marketing
regulations. How should the compliance professional FIRST respond?
a. Contact the bank's marketing manager to discuss the finding
b. Develop a policy requiring that all marketing materials be reviewed and approved by compliance
before being published
c. Set up a training class for the marketing department
d. Review the marketing materials and applicable regulations to verify the finding. - Correct
answer✅✅ D
A compliance professional is a member of the task force studying how the bank can reduce customer
complaints about holding deposits. One proposed solution involves purchasing an expensive system that
,will reduce the number of holds placed by evaluating the customer's history and relationship with the
bank. Which of the following roles is MOST important for the compliance professional on the task force?
a. Developing training for tellers who will use the new system
b. Setting parameters for what the system should review to determine the strength of the customer
relationship
c. Validating the system to ensure it complies with regulatory restrictions
d. Conducting a cost-benefit analysis to determine if the system is the best solution - Correct
answer✅✅ C
ABC National Bank regularly purchases mortgage loans from ACME Mortgage Company, a local
mortgage broker. ACME places a mandatory arbitration clause in each of its mortgage documents. ACME
believes this clause is necessary because of state laws governing arbitration. Is this clause a problem for
ABC National?
a. No, unless other predatory or abusive lending practices are evident in the loans sold by ACME
b. Yes, the clause is a sign of an abusive lender, and the bank should not purchase the loans
c. Yes, the bank should make ACME strike the clause from future loans
d. No, this is a common practice and the bank can ignore it - Correct answer✅✅ A
The OCC recommends all but one of the following actions to help prevent a national bank's purchasing
or acquiring predato1y or abusive loans. Which practice is NOT recommended?
a. Establish policies on the bank's relationship with third-party brokers and originators
b. Review loan documentation
c. Audit the third-party broker
d. Require the broker to establish a reserve account for legal contingencies - Correct answer✅✅ D
Second State Bank offers a mortgage product that involves simultaneous second lien loans. These
include a first lien for up to 90 percent of the purchase price and a second loan for the down payment,
secured by a second lien on the property. The bank would like to be in full compliance with the
lnteragency Guidance on Nontraditional Mortgage Product Risks. Which of the following should Second
State Bank incorporate into its loan program?
a. Risk management procedures to measure the risk of all simultaneous second lien loans and report
results to management
b. A 100 percent loan loss reserve on all simultaneous second lien loans
, c. A product combining simultaneous second lien loans with negative amortization features made to
nonowner occupied borrowers
d. A prepayment penalty on all simultaneous second lien loans - Correct answer✅✅ A
1. According to the 2007 interagency statement on subprime mortgage lending, what should an
institution offering mortgage loans to subprime borrowers provide before submission of an application?
a. Information on local residential real property values
b. Payment shock information
c. Truth in Lending disclosures
d. Initial escrow statements - Correct answer✅✅ B
1. The senior lender at ABC bank would like to make stated income mortgage loans (i.e., loans where the
bank does not verify the applicant's income) to mortgage customers, including subprime borrowers.
Under the statement on subprime mortgage lending, which of the following is the best statement of the
bank's responsibility regarding this new program?
a. Due to the risks, it should not implement such a program for subprime borrowers.
b. The bank should make a policy for this program that includes mitigating factors for the risks.
c. The bank should set stringent debt-to-income ratios for these loans.
d. The bank should establish workout procedures for such loans in advance of making them. - Correct
answer✅✅ B
First National Bank is preparing for a regulatory examination that will include a HELOC portfolio acquired
through a merger last year. The Risk Management team is reviewing internal controls, policies, and
procedures to ensure the process for handling HELOC transactions meets expectations outlined in the
Interagency Guidance on Home Equity Lines of Credit Nearing Their
End-of-Draw Period. Which of the following should not be evidenced in the bank's current HELOC risk
management practices?
a. Detailed monthly reporting on end-of-draw exposures is provided for inclusion in .t\LLL estimates
b. When working with a high-risk borrower, the bank evaluates their ability to repay the loan
c. Borrowers are directed to contact the Bank's customer service team two weeks before their end-of-
draw date to discuss alternative repayment options
d. The consumer lending quality assurance team performs quarterly reviews on a sample of H - Correct
answer✅✅ C
passed 2026/2027
Legislation was recently enacted to reform consumer real estate protection laws, and the bank will now
have to change tl1e way it documents, discloses, and advertises real estate loans, an integral product
line at your bank. What should the compliance professional do FIRST to implement the new law within
the bank?
a. Read the law and write a new real estate compliance policy
b. Form a task force of the business unit managers whose departments will be affected by the law to
collectively form an action plan
c. Talk to the bank president about the need for more resources in compliance
d. Sign up all bank personnel affected by the changes for a seminar on the new law - Correct
answer✅✅ B
A bank's president would like to begin offering a new home equity line of credit product within ///Jo
weeks. In all cases the bottO\ver's principal dwelling will secure the loan. The president has already
launched a planned advertising campaign for the bank's major service markets. what should the
compliance professional do FIRST?
a. Hire an attorney to write the appropriate legal documents and disclosures
b. Write a memo to the president explaining why the compliance professional should have been in on
the process at an earlier date
c. Begin training sessions for the lending and loan operations staff on the compliance issues involved
d. Perform a risk assessment to determine the bank's level of risk in offering this new product - Correct
answer✅✅ D
A bank has a large mortgage department as well as a high HMDA error rate. An expensive software
program could automate the process, but the business unit manager does not want to purchase the
software because of its expense. Though it is not as efficient, the manager prefers to make some
improvements to tl1e manual process, add some more robust monitoring procedures, and opt not to
purchase the software. What should the compliance professional do?
a. Elevate the issue to a higher authority to force the mortgage department unit to purchase tl1e
software
b. Nothing; the compliance professional's job is done ,with the completed research
,c. Document the fact that the level of risk present with manual systems is acceptable to the mortgage
department business unit
d. Write a memo to the president of the bank that explains the risk assessment for this area - Correct
answer✅✅ C
The federal banking agencies have proposed an amendment to Regulation Z that would require a new
early disclosure statement for loans secured by the borrower's principal dwelling. After reading the
proposed change, what should the compliance professional do FIRST?
a. Establish a task force to study the proposed rule.
b. Contact the bank's platform software vendor to determine whether it will be ready for the change
c. Prepare a summary document that outlines the effects the proposed rule would have on the bank's
operations
d. Train bank staff on the new rule - Correct answer✅✅ C
During a recent compliance examination, regulatory examiners found that the bank was not conducting
flood hazard area determinations before closing on construction loans. The compliance professional has
reviewed the files and agreed with the examiners' finding. What should be done FIRST?
a. Review the bank's flood policies and procedures to determine where the compliance failure occurred
b. Conduct a risk assessment of the flood determination requirement on construction loans
c. Prepare an analysis for bank management explaining the requirement
d. Review all construction loan files to determine the extent of the problem - Correct answer✅✅ A
1. During a recent compliance examination, regulators cited the bank for violations of various marketing
regulations. How should the compliance professional FIRST respond?
a. Contact the bank's marketing manager to discuss the finding
b. Develop a policy requiring that all marketing materials be reviewed and approved by compliance
before being published
c. Set up a training class for the marketing department
d. Review the marketing materials and applicable regulations to verify the finding. - Correct
answer✅✅ D
A compliance professional is a member of the task force studying how the bank can reduce customer
complaints about holding deposits. One proposed solution involves purchasing an expensive system that
,will reduce the number of holds placed by evaluating the customer's history and relationship with the
bank. Which of the following roles is MOST important for the compliance professional on the task force?
a. Developing training for tellers who will use the new system
b. Setting parameters for what the system should review to determine the strength of the customer
relationship
c. Validating the system to ensure it complies with regulatory restrictions
d. Conducting a cost-benefit analysis to determine if the system is the best solution - Correct
answer✅✅ C
ABC National Bank regularly purchases mortgage loans from ACME Mortgage Company, a local
mortgage broker. ACME places a mandatory arbitration clause in each of its mortgage documents. ACME
believes this clause is necessary because of state laws governing arbitration. Is this clause a problem for
ABC National?
a. No, unless other predatory or abusive lending practices are evident in the loans sold by ACME
b. Yes, the clause is a sign of an abusive lender, and the bank should not purchase the loans
c. Yes, the bank should make ACME strike the clause from future loans
d. No, this is a common practice and the bank can ignore it - Correct answer✅✅ A
The OCC recommends all but one of the following actions to help prevent a national bank's purchasing
or acquiring predato1y or abusive loans. Which practice is NOT recommended?
a. Establish policies on the bank's relationship with third-party brokers and originators
b. Review loan documentation
c. Audit the third-party broker
d. Require the broker to establish a reserve account for legal contingencies - Correct answer✅✅ D
Second State Bank offers a mortgage product that involves simultaneous second lien loans. These
include a first lien for up to 90 percent of the purchase price and a second loan for the down payment,
secured by a second lien on the property. The bank would like to be in full compliance with the
lnteragency Guidance on Nontraditional Mortgage Product Risks. Which of the following should Second
State Bank incorporate into its loan program?
a. Risk management procedures to measure the risk of all simultaneous second lien loans and report
results to management
b. A 100 percent loan loss reserve on all simultaneous second lien loans
, c. A product combining simultaneous second lien loans with negative amortization features made to
nonowner occupied borrowers
d. A prepayment penalty on all simultaneous second lien loans - Correct answer✅✅ A
1. According to the 2007 interagency statement on subprime mortgage lending, what should an
institution offering mortgage loans to subprime borrowers provide before submission of an application?
a. Information on local residential real property values
b. Payment shock information
c. Truth in Lending disclosures
d. Initial escrow statements - Correct answer✅✅ B
1. The senior lender at ABC bank would like to make stated income mortgage loans (i.e., loans where the
bank does not verify the applicant's income) to mortgage customers, including subprime borrowers.
Under the statement on subprime mortgage lending, which of the following is the best statement of the
bank's responsibility regarding this new program?
a. Due to the risks, it should not implement such a program for subprime borrowers.
b. The bank should make a policy for this program that includes mitigating factors for the risks.
c. The bank should set stringent debt-to-income ratios for these loans.
d. The bank should establish workout procedures for such loans in advance of making them. - Correct
answer✅✅ B
First National Bank is preparing for a regulatory examination that will include a HELOC portfolio acquired
through a merger last year. The Risk Management team is reviewing internal controls, policies, and
procedures to ensure the process for handling HELOC transactions meets expectations outlined in the
Interagency Guidance on Home Equity Lines of Credit Nearing Their
End-of-Draw Period. Which of the following should not be evidenced in the bank's current HELOC risk
management practices?
a. Detailed monthly reporting on end-of-draw exposures is provided for inclusion in .t\LLL estimates
b. When working with a high-risk borrower, the bank evaluates their ability to repay the loan
c. Borrowers are directed to contact the Bank's customer service team two weeks before their end-of-
draw date to discuss alternative repayment options
d. The consumer lending quality assurance team performs quarterly reviews on a sample of H - Correct
answer✅✅ C
