FICEP Final CUNA Review | Questions and
Answers | Complete Solution | Graded A+ |
2025 Updated Study Set
Section 1: Credit Union Fundamentals (Questions 1–10)
Question 1: Which federal agency primarily regulates credit unions in the United States? A)
FDIC B) CFPB C) NCUA (National Credit Union Administration) D) OCC
Correct Answer: C Rationale: The NCUA is the primary regulator and insurer for federal
credit unions under the Federal Credit Union Act. The FDIC (A) regulates banks; CFPB (B)
enforces consumer protection laws; OCC (D) oversees national banks.
Question 2: The core philosophy of credit unions is based on: A) Maximizing shareholder
profits B) The cooperative principle of "people helping people" C) Government ownership
and control D) Exclusive membership for high-net-worth individuals
Correct Answer: B Rationale: Credit unions operate on the cooperative principle of "people
helping people" (CUNA’s 7 Cooperative Principles). Profit maximization (A) is a bank objective;
government control (C) and exclusivity (D) contradict credit union values.
Question 3: Which of the following is a key difference between credit unions and banks? A)
Credit unions are for-profit institutions B) Credit unions are member-owned cooperatives C)
Banks offer higher interest rates on deposits D) Credit unions are regulated by the OCC
Correct Answer: B Rationale: Credit unions are member-owned cooperatives, while banks
are shareholder-owned. For-profit status (A) applies to banks; interest rates (C) vary; NCUA
(not OCC) regulates credit unions (D).
Question 4: The board of directors in a credit union is elected by: A) The NCUA B) The credit
union’s members C) The CEO D) The state banking commission
, Correct Answer: B Rationale: Credit union members elect the board of directors (one
member, one vote). The NCUA (A) regulates but does not elect; the CEO (C) and state
commission (D) have no electoral role.
Question 5: Which of the following is NOT one of the 7 Cooperative Principles of credit
unions? A) Voluntary and Open Membership B) Democratic Member Control C) Maximization
of Profit for Shareholders D) Concern for Community
Correct Answer: C Rationale: The 7 Cooperative Principles include voluntary membership
(A), democratic control (B), and community concern (D). Profit maximization (C) is a bank
objective , not a credit union principle.
Question 6: The primary purpose of the National Credit Union Share Insurance Fund
(NCUSIF) is to: A) Provide loans to credit unions B) Insure member deposits up to $250,000
per account C) Regulate interest rates on credit union loans D) Invest in credit union
infrastructure
Correct Answer: B Rationale: The NCUSIF insures member deposits up to $250,000,
similar to FDIC insurance for banks. It does not provide loans (A), regulate rates (C), or invest in
infrastructure (D).
Question 7: Which of the following is a characteristic of a federal credit union? A) Chartered
by a state government B) Chartered and regulated by the NCUA C) Exempt from federal
taxes D) Limited to serving military personnel
Correct Answer: B Rationale: Federal credit unions are chartered and regulated by the
NCUA. State-chartered credit unions (A) are regulated by state agencies; credit unions are
tax-exempt (C) but not all serve military (D).
Question 8: The credit union’s field of membership (FOM) defines: A) The geographic area
where the credit union can advertise B) Who is eligible to join the credit union C) The types
of loans the credit union can offer D) The interest rates on share accounts
Correct Answer: B Rationale: The field of membership (FOM) determines eligibility for
membership based on criteria like employment, location, or association. Advertising (A), loan
types (C), and rates (D) are unrelated.
Answers | Complete Solution | Graded A+ |
2025 Updated Study Set
Section 1: Credit Union Fundamentals (Questions 1–10)
Question 1: Which federal agency primarily regulates credit unions in the United States? A)
FDIC B) CFPB C) NCUA (National Credit Union Administration) D) OCC
Correct Answer: C Rationale: The NCUA is the primary regulator and insurer for federal
credit unions under the Federal Credit Union Act. The FDIC (A) regulates banks; CFPB (B)
enforces consumer protection laws; OCC (D) oversees national banks.
Question 2: The core philosophy of credit unions is based on: A) Maximizing shareholder
profits B) The cooperative principle of "people helping people" C) Government ownership
and control D) Exclusive membership for high-net-worth individuals
Correct Answer: B Rationale: Credit unions operate on the cooperative principle of "people
helping people" (CUNA’s 7 Cooperative Principles). Profit maximization (A) is a bank objective;
government control (C) and exclusivity (D) contradict credit union values.
Question 3: Which of the following is a key difference between credit unions and banks? A)
Credit unions are for-profit institutions B) Credit unions are member-owned cooperatives C)
Banks offer higher interest rates on deposits D) Credit unions are regulated by the OCC
Correct Answer: B Rationale: Credit unions are member-owned cooperatives, while banks
are shareholder-owned. For-profit status (A) applies to banks; interest rates (C) vary; NCUA
(not OCC) regulates credit unions (D).
Question 4: The board of directors in a credit union is elected by: A) The NCUA B) The credit
union’s members C) The CEO D) The state banking commission
, Correct Answer: B Rationale: Credit union members elect the board of directors (one
member, one vote). The NCUA (A) regulates but does not elect; the CEO (C) and state
commission (D) have no electoral role.
Question 5: Which of the following is NOT one of the 7 Cooperative Principles of credit
unions? A) Voluntary and Open Membership B) Democratic Member Control C) Maximization
of Profit for Shareholders D) Concern for Community
Correct Answer: C Rationale: The 7 Cooperative Principles include voluntary membership
(A), democratic control (B), and community concern (D). Profit maximization (C) is a bank
objective , not a credit union principle.
Question 6: The primary purpose of the National Credit Union Share Insurance Fund
(NCUSIF) is to: A) Provide loans to credit unions B) Insure member deposits up to $250,000
per account C) Regulate interest rates on credit union loans D) Invest in credit union
infrastructure
Correct Answer: B Rationale: The NCUSIF insures member deposits up to $250,000,
similar to FDIC insurance for banks. It does not provide loans (A), regulate rates (C), or invest in
infrastructure (D).
Question 7: Which of the following is a characteristic of a federal credit union? A) Chartered
by a state government B) Chartered and regulated by the NCUA C) Exempt from federal
taxes D) Limited to serving military personnel
Correct Answer: B Rationale: Federal credit unions are chartered and regulated by the
NCUA. State-chartered credit unions (A) are regulated by state agencies; credit unions are
tax-exempt (C) but not all serve military (D).
Question 8: The credit union’s field of membership (FOM) defines: A) The geographic area
where the credit union can advertise B) Who is eligible to join the credit union C) The types
of loans the credit union can offer D) The interest rates on share accounts
Correct Answer: B Rationale: The field of membership (FOM) determines eligibility for
membership based on criteria like employment, location, or association. Advertising (A), loan
types (C), and rates (D) are unrelated.
