UCE Final - MUltiplE ChoiCE ExaM /latEst
and CoMplEtE/answErs 100% CorrECt
1. annual information security report to the board
2. assess security risks (cust. inf. etc.)
3. implement internal controls to protect data, limit intrusion, etc.
4. oversee service provider arrangements
Composite ratings questions: (may be more than 1)
1-some degree of supervisory concern in one or more areas?
2-serious financial or managerial deficiencies that result in unsatisfactory performance?
3-substantial compliance with laws and regs?
4-failure is highly probable?
5-fundamentally sound?
6-extremely unsafe and unsound?
7-no component rating more severe than 3?
8-problems range from severe to critically deficient?
9-may be in significant noncompliance with laws and regs?
10-weeaknesses range from moderate to severe?
11-will not have component worse than 4?
12-district possibility of failure? ✔✔ 1. 3
2. 4
3. 1 and 2
4. 5
5. 2
6. 5
,7. 2
8. 4
9. 3
10. 3
11. 3
12. 4
What are the adjectives used for risk management in a 3, 4, and 5 composite rating? ✔✔ 3 less than
satisfactory
4 generally unacceptable
5 inadequate
AQ of 1 indicates strong asset quality and credit administration practices. Identified weaknesses are
_________ in nature and risk exposure is _______ in relation to capital protection and management's
abilities. AQ of 2 indicates satisfactory asset quality and credit administration practices. The level and
severity of classifications and other weaknesses warrant a ______________ of supervisory attention.
Risk exposure is _______________ capital protection and management's abilities. ✔✔ minor
modest
limited level
commensurate with
AQ rating of 3 is assigned when asset quality _______ credit administration practices are
______________. _________ indicate deterioration in asset quality or an increase in risk exposure. The
level and severity of classified assets, other weaknesses, and risks require ____________________.
There is generally a need to improve credit administration and risk management practices. ✔✔ OR
less than satisfactory
Trends may be stable or
elevated level of supervisory concern
AQ rating of 4 is assigned to financial institutions with ________ asset quality OR credit administration
practices. The levels of risk and problem assets are ___ and _____, and they subject the financial
institution to potential losses that, if left unchecked, may threaten its viability. ✔✔ deficient
, significant
inadequately controlled
AQ rating of 5 - represents _______ asset quality OR credit administration practices that present an
imminent threat to the institution's viability. ✔✔ critically deficient
What are the 4 prohibited basis groups covered under both ECOA and FHA? ✔✔ Race/Color, National
Origin, Sex, Religion
what are the 3 prohibited basis groups exclusive to ECOA? ✔✔ marital status, age, use of welfare
programs
W.A.M.
what are the two prohibited basis groups exclusive to FHA? ✔✔ Family status, handicap
For retail loans with non real estate collateral, does the bank need to charge off the entire balance? ✔✔
in leu of charging off the entire loan balance, loans with nonRE collateral can be charged down to value
less CTS if repossession of collateral is assured and in processs
which loans require a current assessment of value at no later than 180 days past due? And what amount
must be charged off? ✔✔ open and closed end RRE. outstanding balance less value less cost to sell
when should retail loans be rated substandard, what is the exception? ✔✔ all retail loans should be
rated substandard at 90 days. 1-4 family RRE and home equity loans can avoid being rated if they have
LTV less than 60%
When should the bank charge off closed end retail loans? What about open end? ✔✔ closed end 120
days, open end 180 days -- In lieu
of charging off the entire loan balance,
loans with non-real estate collateral may
and CoMplEtE/answErs 100% CorrECt
1. annual information security report to the board
2. assess security risks (cust. inf. etc.)
3. implement internal controls to protect data, limit intrusion, etc.
4. oversee service provider arrangements
Composite ratings questions: (may be more than 1)
1-some degree of supervisory concern in one or more areas?
2-serious financial or managerial deficiencies that result in unsatisfactory performance?
3-substantial compliance with laws and regs?
4-failure is highly probable?
5-fundamentally sound?
6-extremely unsafe and unsound?
7-no component rating more severe than 3?
8-problems range from severe to critically deficient?
9-may be in significant noncompliance with laws and regs?
10-weeaknesses range from moderate to severe?
11-will not have component worse than 4?
12-district possibility of failure? ✔✔ 1. 3
2. 4
3. 1 and 2
4. 5
5. 2
6. 5
,7. 2
8. 4
9. 3
10. 3
11. 3
12. 4
What are the adjectives used for risk management in a 3, 4, and 5 composite rating? ✔✔ 3 less than
satisfactory
4 generally unacceptable
5 inadequate
AQ of 1 indicates strong asset quality and credit administration practices. Identified weaknesses are
_________ in nature and risk exposure is _______ in relation to capital protection and management's
abilities. AQ of 2 indicates satisfactory asset quality and credit administration practices. The level and
severity of classifications and other weaknesses warrant a ______________ of supervisory attention.
Risk exposure is _______________ capital protection and management's abilities. ✔✔ minor
modest
limited level
commensurate with
AQ rating of 3 is assigned when asset quality _______ credit administration practices are
______________. _________ indicate deterioration in asset quality or an increase in risk exposure. The
level and severity of classified assets, other weaknesses, and risks require ____________________.
There is generally a need to improve credit administration and risk management practices. ✔✔ OR
less than satisfactory
Trends may be stable or
elevated level of supervisory concern
AQ rating of 4 is assigned to financial institutions with ________ asset quality OR credit administration
practices. The levels of risk and problem assets are ___ and _____, and they subject the financial
institution to potential losses that, if left unchecked, may threaten its viability. ✔✔ deficient
, significant
inadequately controlled
AQ rating of 5 - represents _______ asset quality OR credit administration practices that present an
imminent threat to the institution's viability. ✔✔ critically deficient
What are the 4 prohibited basis groups covered under both ECOA and FHA? ✔✔ Race/Color, National
Origin, Sex, Religion
what are the 3 prohibited basis groups exclusive to ECOA? ✔✔ marital status, age, use of welfare
programs
W.A.M.
what are the two prohibited basis groups exclusive to FHA? ✔✔ Family status, handicap
For retail loans with non real estate collateral, does the bank need to charge off the entire balance? ✔✔
in leu of charging off the entire loan balance, loans with nonRE collateral can be charged down to value
less CTS if repossession of collateral is assured and in processs
which loans require a current assessment of value at no later than 180 days past due? And what amount
must be charged off? ✔✔ open and closed end RRE. outstanding balance less value less cost to sell
when should retail loans be rated substandard, what is the exception? ✔✔ all retail loans should be
rated substandard at 90 days. 1-4 family RRE and home equity loans can avoid being rated if they have
LTV less than 60%
When should the bank charge off closed end retail loans? What about open end? ✔✔ closed end 120
days, open end 180 days -- In lieu
of charging off the entire loan balance,
loans with non-real estate collateral may
