CRCM Exam Practice UPDATED ACTUAL
Exam Questions and CORRECT Answers
To be effective, compliance risk management professionals must design a framework to ensure
that bank management understands the risks and the steps that must be taken to mitigate them.
The many roles compliance professionals fill incorporate risk management aspects including:
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. All of these
They also embrace the concept of risk-based compliance management. They expect compliance
management to be tailored to the bank, be it large or small, offering standard or specialty
financial services, simple or complex products lines, and adjusted as appropriate for the customer
base as that issued for the BankSecrecy Act, also establishes their expectations that a bank"™s
program be risk based. Who are they?
A. Outsourcing firms
B. Foreign financial service providers
C. Bank regulatory agencies
D. Risk management organizations - CORRECT ANSWER - C. Bank regulatory agencies
A compliance professional"™s responsibilities include all of the following EXCEPT:
A. Understanding the business units operating environment and risk tolerance
B. Performing risk assessments with the assistance of business units to determine current risk
levels and risks associated with the bank"™s products, lines of business, customers, and
locations, among other factors
C. Working with business units to ensure prompt corrective action for any detected errors
D. Assisting business lines with compliance training for employees, as needed - CORRECT
ANSWER - D. Assisting busines lines with compliance training for employees, as needed
,______________ should include basic elements designed to understand and mitigate risk. It
usually includes:Written program -Compliance-related policies and procedures
A. Tactical Compliance procedure
B. Rank solution
C. Compliance program
D. None of these - CORRECT ANSWER - C. Compliance program
In a compliance program, tactical compliance procedures should be integrated into business line
procedures, such as how to deliver an Adverse Action Notice when an application is declined. In
this case:
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 - A. Regulations should be applied
consistently to procedures throughout the bank AND
B. Revisions to procedures should be based on compliance expertise and not mere editing.
Which of the following should be done during research and interpreting regulations Compliance
professionals in mitigating compliance risk?
A. Track regulatory proposals
B. Implementing final regulatory rules
C. Understanding the business units"™ operating environment and risk tolerance
D. Ranking solutions as high, moderate and low risk - CORRECT ANSWER - A.
Tracking regulatory proposals, and
B. Implementing final regulatory rules, and
D. Ranking solutions as high, moderate and low risk
The compliance program should address plans to verify adherence to applicable regulations
through:
A. Ongoing monitoring to evaluate the program, self monitoring and corrective action
,B. Self monitoring
C. Periodic reviews
D. Ongoing monitoring to evaluate the program, self monitoring and periodic reviews -
CORRECT ANSWER - A. Ongoing monitoring to evaluate the program, self monitoring
and corrective action.
There is no established template for documenting compliance risk. Each institution should
develop a risk assessment that fits its risk profile. The components that are commonly used
throughout the industry 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.
Training the leadership of compliance regulation program
In Compliance regulation and risk assessment key performance indicators usually 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 - A. Fines or penalities, and
B. Customer complaints, and
C. Regulatory criticism from a regulator or internal or external auditors
The risk trend shows the direction of risk and probable change to risk over the next 12 months. A
trend toward increasing risk means that
A. Management may want to take additional action through more controls or increased reviews
B. Risk may prompt a decrease in controls and improved efficiencies
C. Controls currently in place are appropriate to succeed in keeping risks within
management"™s established risk-tolerance level
, D. Risk measurements exceed management"™s tolerance for risk - CORRECT
ANSWER - A. Management may want to take additional action through more controls or
increased reviews
Compliance professionals have a duty to keep senior management and the board apprised of the
state of compliance within the bank through which of the following:
A. Self-monitoring and audit results
B. Proactive compliance controls
C. Timely and accurate regulatory reporting
D. All of the options mentioned above - CORRECT ANSWER - D. All of the options
mentioned above
After a compliance officer develops a base of knowledge of regulations, he or she must begin the
art of applying regulations in a risk management environment.Which of the following is NOT
out of a few things to be kept in mind when determining what to do FIRST?
A. Think practically about your role as an advisor. Involve the business units in the decision
process rather than making decisions for them
B. Calculate the institution"™s consolidated risk profile
C. Make sure you understand the level of risk the bank will tolerate, so decisions do not exceed
this limit
D. Add value by analyzing regulatory requirements for the business units before you present
proposed or final rules or solutions - CORRECT ANSWER - B. Calculate the institutions
consolidated risk profile
In the mid-1980s a movement began among the federal supervisory agencies to produce a
uniform ARM regulation. In 1988, the Federal Reserve Board added the uniform ARM
disclosure requirements to a regulation. Therefore, most of the original OCC ARM consumer
protection requirements are now found in this new regulation. Adjustable rate mortgage loans
made by national banks may be subject to the OCC"™s ARM regulation or the requirements of
this new regulation, or both. This new regulation is:
A. Regulation Z
B. Truth in Lending
C. CFR 34.21, 34.22 and 34.23
Exam Questions and CORRECT Answers
To be effective, compliance risk management professionals must design a framework to ensure
that bank management understands the risks and the steps that must be taken to mitigate them.
The many roles compliance professionals fill incorporate risk management aspects including:
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. All of these
They also embrace the concept of risk-based compliance management. They expect compliance
management to be tailored to the bank, be it large or small, offering standard or specialty
financial services, simple or complex products lines, and adjusted as appropriate for the customer
base as that issued for the BankSecrecy Act, also establishes their expectations that a bank"™s
program be risk based. Who are they?
A. Outsourcing firms
B. Foreign financial service providers
C. Bank regulatory agencies
D. Risk management organizations - CORRECT ANSWER - C. Bank regulatory agencies
A compliance professional"™s responsibilities include all of the following EXCEPT:
A. Understanding the business units operating environment and risk tolerance
B. Performing risk assessments with the assistance of business units to determine current risk
levels and risks associated with the bank"™s products, lines of business, customers, and
locations, among other factors
C. Working with business units to ensure prompt corrective action for any detected errors
D. Assisting business lines with compliance training for employees, as needed - CORRECT
ANSWER - D. Assisting busines lines with compliance training for employees, as needed
,______________ should include basic elements designed to understand and mitigate risk. It
usually includes:Written program -Compliance-related policies and procedures
A. Tactical Compliance procedure
B. Rank solution
C. Compliance program
D. None of these - CORRECT ANSWER - C. Compliance program
In a compliance program, tactical compliance procedures should be integrated into business line
procedures, such as how to deliver an Adverse Action Notice when an application is declined. In
this case:
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 - A. Regulations should be applied
consistently to procedures throughout the bank AND
B. Revisions to procedures should be based on compliance expertise and not mere editing.
Which of the following should be done during research and interpreting regulations Compliance
professionals in mitigating compliance risk?
A. Track regulatory proposals
B. Implementing final regulatory rules
C. Understanding the business units"™ operating environment and risk tolerance
D. Ranking solutions as high, moderate and low risk - CORRECT ANSWER - A.
Tracking regulatory proposals, and
B. Implementing final regulatory rules, and
D. Ranking solutions as high, moderate and low risk
The compliance program should address plans to verify adherence to applicable regulations
through:
A. Ongoing monitoring to evaluate the program, self monitoring and corrective action
,B. Self monitoring
C. Periodic reviews
D. Ongoing monitoring to evaluate the program, self monitoring and periodic reviews -
CORRECT ANSWER - A. Ongoing monitoring to evaluate the program, self monitoring
and corrective action.
There is no established template for documenting compliance risk. Each institution should
develop a risk assessment that fits its risk profile. The components that are commonly used
throughout the industry 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.
Training the leadership of compliance regulation program
In Compliance regulation and risk assessment key performance indicators usually 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 - A. Fines or penalities, and
B. Customer complaints, and
C. Regulatory criticism from a regulator or internal or external auditors
The risk trend shows the direction of risk and probable change to risk over the next 12 months. A
trend toward increasing risk means that
A. Management may want to take additional action through more controls or increased reviews
B. Risk may prompt a decrease in controls and improved efficiencies
C. Controls currently in place are appropriate to succeed in keeping risks within
management"™s established risk-tolerance level
, D. Risk measurements exceed management"™s tolerance for risk - CORRECT
ANSWER - A. Management may want to take additional action through more controls or
increased reviews
Compliance professionals have a duty to keep senior management and the board apprised of the
state of compliance within the bank through which of the following:
A. Self-monitoring and audit results
B. Proactive compliance controls
C. Timely and accurate regulatory reporting
D. All of the options mentioned above - CORRECT ANSWER - D. All of the options
mentioned above
After a compliance officer develops a base of knowledge of regulations, he or she must begin the
art of applying regulations in a risk management environment.Which of the following is NOT
out of a few things to be kept in mind when determining what to do FIRST?
A. Think practically about your role as an advisor. Involve the business units in the decision
process rather than making decisions for them
B. Calculate the institution"™s consolidated risk profile
C. Make sure you understand the level of risk the bank will tolerate, so decisions do not exceed
this limit
D. Add value by analyzing regulatory requirements for the business units before you present
proposed or final rules or solutions - CORRECT ANSWER - B. Calculate the institutions
consolidated risk profile
In the mid-1980s a movement began among the federal supervisory agencies to produce a
uniform ARM regulation. In 1988, the Federal Reserve Board added the uniform ARM
disclosure requirements to a regulation. Therefore, most of the original OCC ARM consumer
protection requirements are now found in this new regulation. Adjustable rate mortgage loans
made by national banks may be subject to the OCC"™s ARM regulation or the requirements of
this new regulation, or both. This new regulation is:
A. Regulation Z
B. Truth in Lending
C. CFR 34.21, 34.22 and 34.23
