CRCM EXAM 2025 QUESTIONS AND
ANSWERS
During a recent compliance examination, regulators cited the bank for violations of various
marketing regulations. How should the compliance professional FIRST respond? -
ANS Review the marketing materials and applicable regulations to verify the finding.
When a bank is cited for a regulatory violation, the compliance professional must first
determine whether the bank should agree with it. This is done by reviewing the pertinent
regulations and affected materials. If the citation is supported by the regulations, then the
compliance manager should discuss it with the marketing manager. Solutions may include
training marketing personnel or establishing new policies for reviews.
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? - ANS Review the bank's flood policies and procedures to determine
where the compliance failure occurred.
If the compliance professional agrees with the regulators on a finding, the root cause of the
error must be determined by consulting policies and procedures. There is no benefit to
conducting a risk assessment because the issue is known. After determining the cause, then the
extent of the problem must be determined. Only after gathering this pertinent information can
the compliance professional write an analysis for management explaining the situation
Legislation was recently enacted to reform consumer real estate protection laws, and the bank
will now have to change the 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? - ANS Form a task force of the business unit
managers whose departments will be affected by the law to collectively form an action plan.
COPYRIGHT © 2025 THESTAR ALL RIGHTS RESERVED
1
,When implementing new rules, it is beneficial to start with a task force of affected managers
that can make decisions about how to implement the new rule. The other actions would
eventually become necessary, but it would be timelier to write the new policy and then develop
training only after the compliance professional has a clearer idea of needed actions. Talking to
the bank president about resources would not be helpful to implementing new legislation,
unless it can be shown as necessary to complying as the business units have chosen.
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? -
ANS Prepare a summary document that outlines the effects the proposed rule would have
on the bank's operations.
This proposed change is important to the bank. The compliance professional should first
analyze its effect and provide that summary to the affected business units, and then establish a
task force to study the proposal. Contacting the vendor may be part of the risk considered by
the task force. Training bank staff regarding the new rule is not appropriate until the rule is
final. Proposed rules sometimes do not become final or may change with the final ruling.
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 the manual process, add some more robust monitoring
procedures, and opt not to purchase the software. What should the compliance professional
do? - ANS Document the fact that the level of risk present with manual systems is acceptable
to the mortgage department business unit.
The job of the compliance officer is to assess the risks and inform management of those risks.
The business unit can decide what level of risk to accept. If the high level of HMDA errors
continues, even with the improved procedures, the problem can be escalated and brought to
senior management's attention.
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
COPYRIGHT © 2025 THESTAR ALL RIGHTS RESERVED
2
,compliance professional on the task force? - ANS Validating the system to ensure it complies
with regulatory restrictions.
The compliance professional's role on a task force is to provide knowledge about compliance
risk, such as whether the system is in compliance with relevant laws and regulations. The
training, parameters, and cost-benefit analysis are more operational in nature.
A bank's president would like to begin offering a new home equity line of credit product within
two weeks. In all cases the borrower'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? - ANS Perform a risk assessment to determine
the bank's level of risk in offering this new product.
Before going forward, the compliance professional needs to determine what level and types of
risk are involved. It is possible the new product is similar to an existing product, and the new
offering will not increase the bank's risk. After determining the risk, the compliance
professional will know better how to proceed
When developing a training plan for commercial lenders, which of the following regulations is
least important to include? - ANS Truth in Lending Act, CFPB Regulation Z
The compliance professional should risk manage the training program. A commercial group
needs to know the rules for fair lending, HMDA, and insider lending. Regulation Z is more
relevant for the consumer lending audience.
Under Regulation M, what is a "consumer lease"?
12 CFR 1013 - ANS A consumer lease for the annually adjusted threshold amount or less for
the use of personal property
Roberta Milton's car lease with First National Bank reached its termination on August 1.
Roberta and the bank agreed to extend the lease on a month-to-month basis without charging
her a fee for doing so. What disclosure responsibilities does the bank have now? - ANS None,
until after six months of the month-to-month lease
COPYRIGHT © 2025 THESTAR ALL RIGHTS RESERVED
3
, A bank does not know all of the specific information to be disclosed on the lease at the time of
the consummation. What may the bank do after attempting to obtain the information? -
ANS Estimate the amounts and note that the information is estimated
When must disclosures on consumer leasing transactions subject to Regulation M be made? -
ANS Before the consummation of the lease
First National's consumer leasing department placed an ad in the local paper that pictured a car
with the caption, "Sign a lease with us and pay only $275 per month." What other information
must this ad have? - ANS The total amount due at consummation or delivery, the number of
payments required, and any required security deposit
Any of the following triggering terms will require full disclosures in the advertisement: the
amount of any payment, the number of required payments, or a statement that no down
payment or other payment is required at consummation. The information that is required to be
disclosed includes the payment information, the total amount due at consummation, and any
required security deposit. The bank must also disclose any extra charges required at the end of
the lease term if the lessee's liability is based on the difference between the residual value and
the realized value of the leased property.
What insurance disclosures are required in the lease disclosure statement? - ANS The types
and amounts of coverage provided by the lessor and the cost to the lessee.
If provided by the lessor, the disclosure must include the types, amounts, and cost to the
lessee. If not provided by the lessor, the type and amount must be disclosed.
Records regarding compliance with Regulation M must be kept for how long? - ANS Two
years after the disclosures are made
With regard to standards for wear and use of leased property, which of the following
statements is true? - ANS A lessor must provide a notice of wear and use standards on motor
vehicle leases.
COPYRIGHT © 2025 THESTAR ALL RIGHTS RESERVED
4
ANSWERS
During a recent compliance examination, regulators cited the bank for violations of various
marketing regulations. How should the compliance professional FIRST respond? -
ANS Review the marketing materials and applicable regulations to verify the finding.
When a bank is cited for a regulatory violation, the compliance professional must first
determine whether the bank should agree with it. This is done by reviewing the pertinent
regulations and affected materials. If the citation is supported by the regulations, then the
compliance manager should discuss it with the marketing manager. Solutions may include
training marketing personnel or establishing new policies for reviews.
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? - ANS Review the bank's flood policies and procedures to determine
where the compliance failure occurred.
If the compliance professional agrees with the regulators on a finding, the root cause of the
error must be determined by consulting policies and procedures. There is no benefit to
conducting a risk assessment because the issue is known. After determining the cause, then the
extent of the problem must be determined. Only after gathering this pertinent information can
the compliance professional write an analysis for management explaining the situation
Legislation was recently enacted to reform consumer real estate protection laws, and the bank
will now have to change the 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? - ANS Form a task force of the business unit
managers whose departments will be affected by the law to collectively form an action plan.
COPYRIGHT © 2025 THESTAR ALL RIGHTS RESERVED
1
,When implementing new rules, it is beneficial to start with a task force of affected managers
that can make decisions about how to implement the new rule. The other actions would
eventually become necessary, but it would be timelier to write the new policy and then develop
training only after the compliance professional has a clearer idea of needed actions. Talking to
the bank president about resources would not be helpful to implementing new legislation,
unless it can be shown as necessary to complying as the business units have chosen.
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? -
ANS Prepare a summary document that outlines the effects the proposed rule would have
on the bank's operations.
This proposed change is important to the bank. The compliance professional should first
analyze its effect and provide that summary to the affected business units, and then establish a
task force to study the proposal. Contacting the vendor may be part of the risk considered by
the task force. Training bank staff regarding the new rule is not appropriate until the rule is
final. Proposed rules sometimes do not become final or may change with the final ruling.
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 the manual process, add some more robust monitoring
procedures, and opt not to purchase the software. What should the compliance professional
do? - ANS Document the fact that the level of risk present with manual systems is acceptable
to the mortgage department business unit.
The job of the compliance officer is to assess the risks and inform management of those risks.
The business unit can decide what level of risk to accept. If the high level of HMDA errors
continues, even with the improved procedures, the problem can be escalated and brought to
senior management's attention.
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
COPYRIGHT © 2025 THESTAR ALL RIGHTS RESERVED
2
,compliance professional on the task force? - ANS Validating the system to ensure it complies
with regulatory restrictions.
The compliance professional's role on a task force is to provide knowledge about compliance
risk, such as whether the system is in compliance with relevant laws and regulations. The
training, parameters, and cost-benefit analysis are more operational in nature.
A bank's president would like to begin offering a new home equity line of credit product within
two weeks. In all cases the borrower'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? - ANS Perform a risk assessment to determine
the bank's level of risk in offering this new product.
Before going forward, the compliance professional needs to determine what level and types of
risk are involved. It is possible the new product is similar to an existing product, and the new
offering will not increase the bank's risk. After determining the risk, the compliance
professional will know better how to proceed
When developing a training plan for commercial lenders, which of the following regulations is
least important to include? - ANS Truth in Lending Act, CFPB Regulation Z
The compliance professional should risk manage the training program. A commercial group
needs to know the rules for fair lending, HMDA, and insider lending. Regulation Z is more
relevant for the consumer lending audience.
Under Regulation M, what is a "consumer lease"?
12 CFR 1013 - ANS A consumer lease for the annually adjusted threshold amount or less for
the use of personal property
Roberta Milton's car lease with First National Bank reached its termination on August 1.
Roberta and the bank agreed to extend the lease on a month-to-month basis without charging
her a fee for doing so. What disclosure responsibilities does the bank have now? - ANS None,
until after six months of the month-to-month lease
COPYRIGHT © 2025 THESTAR ALL RIGHTS RESERVED
3
, A bank does not know all of the specific information to be disclosed on the lease at the time of
the consummation. What may the bank do after attempting to obtain the information? -
ANS Estimate the amounts and note that the information is estimated
When must disclosures on consumer leasing transactions subject to Regulation M be made? -
ANS Before the consummation of the lease
First National's consumer leasing department placed an ad in the local paper that pictured a car
with the caption, "Sign a lease with us and pay only $275 per month." What other information
must this ad have? - ANS The total amount due at consummation or delivery, the number of
payments required, and any required security deposit
Any of the following triggering terms will require full disclosures in the advertisement: the
amount of any payment, the number of required payments, or a statement that no down
payment or other payment is required at consummation. The information that is required to be
disclosed includes the payment information, the total amount due at consummation, and any
required security deposit. The bank must also disclose any extra charges required at the end of
the lease term if the lessee's liability is based on the difference between the residual value and
the realized value of the leased property.
What insurance disclosures are required in the lease disclosure statement? - ANS The types
and amounts of coverage provided by the lessor and the cost to the lessee.
If provided by the lessor, the disclosure must include the types, amounts, and cost to the
lessee. If not provided by the lessor, the type and amount must be disclosed.
Records regarding compliance with Regulation M must be kept for how long? - ANS Two
years after the disclosures are made
With regard to standards for wear and use of leased property, which of the following
statements is true? - ANS A lessor must provide a notice of wear and use standards on motor
vehicle leases.
COPYRIGHT © 2025 THESTAR ALL RIGHTS RESERVED
4
