FDIC TE Section 12.1 – Applications (Questions With
Definitive Solutions)
Part 303 of the FDIC's Rules and Regulations Correct Answer - governs
the filing and processing of various applications.
Under Section 5 of the FDI Act Correct Answer - the FDIC must
determine as a threshold matter that an applicant is a "depository institution
which is engaged in the business of receiving deposits other than trust funds.
If an institution does not satisfy that threshold requirement as codified under
Part 303 of the FDIC Rules and Regulations.
Factors under Section 6 of the FDI Act Correct Answer - factors are: the
financial history and condition of the bank, the adequacy of its capital
structure, its future earnings prospects, the general character of its
management, the risk presented to the insurance fund, the convenience and
needs of the community to be served, and whether or not its corporate
powers are consistent with the purposes of the Act.
Subpart B of Part 303 of the FDIC's Rules and Regulations Correct Answer -
implements the basic statutory provisions and governs the administrative
processing of applications for deposit insurance
7 Statutory Factors, Proposed or Newly Organized Institutions Correct
Answer - - Financial History and Condition
- Adequacy of the Capital Structure
- Future Earnings Prospects
- General Character of Management
- Risk Presented to the Insurance Fund
- Convenience and Needs of the Community to be Served
- Consistency of Corporate Powers
3 Correct Answer - The investigation report should include a pro forma
statement of the proposed institution for the first **** years of operation.
8 percent Correct Answer - Normally, the initial capital of a proposed
depository institution should be sufficient to provide a Tier 1 capital to assets
leverage ratio (as defined in the appropriate capital regulation of the
, institution's primary federal regulator) of not less than ***** throughout the
first three years of operation.
$2 million Correct Answer - Initial capital should normally be in excess
of ***** net of any pre-opening expenses that will be charged to the
institution's capital after it commences business.
Three years Correct Answer - a reasonable time frame for measuring
deposit growth in newly organized institutions
Management quality Correct Answer - vital and perhaps the single most
important element in determining the applicant's acceptability for deposit
insurance.
Section 19 of the FDI Act Correct Answer - prohibits, without the prior
written consent of the FDIC, a person convicted of criminal offense involving
dishonesty, breach of trust, money laundering, or who has entered into a
pretrial diversion or similar program in connection with a prosecution for
such offense, from becoming or continuing as an institution-affiliated party,
owning or controlling, directly or indirectly an insured institution, or
otherwise participating, directly or indirectly, in the conduct of the affairs of
an insured depository institution.
Five Correct Answer - The FDIC adheres to a fixed policy requiring that
all applicants provide at least a ****-member board of directors, even though
the State law may, in some cases, permit a lesser number.
he first three years of operation. Correct Answer - Applicants are
expected to commit the depository institution to obtain an audit by an
independent public accountant for at least
Under the provisions of Section 18(d) of the Federal Deposit Insurance Act
(the "Act") Correct Answer - no State nonmember insured bank may
establish and operate any new branch, or change the location of any existing
branch, or move its main office, unless it obtains the prior written consent of
the FDIC.
Definitive Solutions)
Part 303 of the FDIC's Rules and Regulations Correct Answer - governs
the filing and processing of various applications.
Under Section 5 of the FDI Act Correct Answer - the FDIC must
determine as a threshold matter that an applicant is a "depository institution
which is engaged in the business of receiving deposits other than trust funds.
If an institution does not satisfy that threshold requirement as codified under
Part 303 of the FDIC Rules and Regulations.
Factors under Section 6 of the FDI Act Correct Answer - factors are: the
financial history and condition of the bank, the adequacy of its capital
structure, its future earnings prospects, the general character of its
management, the risk presented to the insurance fund, the convenience and
needs of the community to be served, and whether or not its corporate
powers are consistent with the purposes of the Act.
Subpart B of Part 303 of the FDIC's Rules and Regulations Correct Answer -
implements the basic statutory provisions and governs the administrative
processing of applications for deposit insurance
7 Statutory Factors, Proposed or Newly Organized Institutions Correct
Answer - - Financial History and Condition
- Adequacy of the Capital Structure
- Future Earnings Prospects
- General Character of Management
- Risk Presented to the Insurance Fund
- Convenience and Needs of the Community to be Served
- Consistency of Corporate Powers
3 Correct Answer - The investigation report should include a pro forma
statement of the proposed institution for the first **** years of operation.
8 percent Correct Answer - Normally, the initial capital of a proposed
depository institution should be sufficient to provide a Tier 1 capital to assets
leverage ratio (as defined in the appropriate capital regulation of the
, institution's primary federal regulator) of not less than ***** throughout the
first three years of operation.
$2 million Correct Answer - Initial capital should normally be in excess
of ***** net of any pre-opening expenses that will be charged to the
institution's capital after it commences business.
Three years Correct Answer - a reasonable time frame for measuring
deposit growth in newly organized institutions
Management quality Correct Answer - vital and perhaps the single most
important element in determining the applicant's acceptability for deposit
insurance.
Section 19 of the FDI Act Correct Answer - prohibits, without the prior
written consent of the FDIC, a person convicted of criminal offense involving
dishonesty, breach of trust, money laundering, or who has entered into a
pretrial diversion or similar program in connection with a prosecution for
such offense, from becoming or continuing as an institution-affiliated party,
owning or controlling, directly or indirectly an insured institution, or
otherwise participating, directly or indirectly, in the conduct of the affairs of
an insured depository institution.
Five Correct Answer - The FDIC adheres to a fixed policy requiring that
all applicants provide at least a ****-member board of directors, even though
the State law may, in some cases, permit a lesser number.
he first three years of operation. Correct Answer - Applicants are
expected to commit the depository institution to obtain an audit by an
independent public accountant for at least
Under the provisions of Section 18(d) of the Federal Deposit Insurance Act
(the "Act") Correct Answer - no State nonmember insured bank may
establish and operate any new branch, or change the location of any existing
branch, or move its main office, unless it obtains the prior written consent of
the FDIC.
