CRCM - Practice Exam UPDATED
ACTUAL Exam Questions and CORRECT
Answers
In which of the following situations is a bank required by federal regulation to verify and record
the identity of the customer?
a. An established customer asks to withdraw $5,000 from his checking account and asks that the
withdrawal be issued in the form of a cashier's check
b. An established customer purchases $2,000 worth of traveler's checks using cash to pay for the
purchase
c. An individual uses cash to purchase traveler's checks totaling $2,000 and, at the same time,
uses cash to purchase a cashier's check for $3,000
d. A customer deposits $6,000 in cash to her savings account - CORRECT ANSWER - c.
An individual uses cash to purchase traveler's checks totaling $2,000 and, at the same time, uses
cash to purchase a cashier's check for $3,000
A financial institution is establishing a new relationship with an insurance brokerage firm to
offer insurance products. The relationship was established with no involvement from the bank's
compliance department. Which action would BEST prevent a breakdown in compliance with
insurance sales regulations?
a. Reviewing applications for credit to ensure conditions for purchasing a life insurance policy
are included
b. Reviewing referral arrangements to ensure sales transactions include anti-coercion and
solicitation provisions
c. Reviewing disclosure requirements to ensure sales transactions by telephone include written
acknowledgment by consumers
d. Reviewing disclosure requirements to ensure sales transactions by mail include providing
disclosures orally to consumers - CORRECT ANSWER - b. Reviewing referral
arrangements to ensure sales transactions include anti-coercion and solicitation provisions
Which of the following is MOST concerning when reviewing quarterly Home Mortgage
Disclosure Act (Regulation C) reports?
,A. Bulk purchases are included in the report
B. The quarterly error rate is consistent with prior quarters
C. Commercial loans are excluded from the report
D. Preapprovals are included if part of a formal program - CORRECT ANSWER - C.
Commercial loans are excluded from the report
A new compliance professional learns that the bank submitted last year's CRA data and took six
months to correct all the mistakes. What is the BEST way to respond to this issue?
A. Develop a plan to start reviewing the current year's CRA data and monitor the errors and
come up with ways to prevent future errors
B. Develop a plan to first submit the current year's CRA data to get all the errors corrected in less
than six months next year
C. Develop a plan to start reviewing the current year's CRA data after December 31 and monitor
the errors and fix all the mistakes before the data is submitted
D. Develop a plan to start reviewing the current year's CRA data but wait until receiving an error
report to fix the errors - CORRECT ANSWER - A. Develop a plan to start reviewing the
current year's CRA data and monitor the errors and come up with ways to prevent future errors
Which three components compose the compliance risk assessment process?
A. Identifying compliance risk, evaluating the likelihood and impact of the risk, and evaluating
risk management controls
B. Identifying inherent risk, evaluating risk management controls, and measuring residual risk
C. Identifying inherent risk, evaluating the likelihood and impact of the risk, and measuring
residual risk
D. Identifying risk of consumer harm, evaluating risk management controls, and measuring
residual risk - CORRECT ANSWER - B. Identifying inherent risk, evaluating risk
management controls, and measuring residual risk
A compliance professional has been tasked with preparing the lines of business for an important
regulatory change. Which step should be taken FIRST?
A. Draft job-specific training to be delivered to impacted lines of business
B. Identify impacted lines of business and develop a team of key stakeholders
,C. Confirm readiness to implement revised guidance on the part of the bank's platform software
provider
D. Research, review, and then provide a summary of the impact to the lines of business -
CORRECT ANSWER - D. Research, review, and then provide a summary of the impact to
the lines of business
When evaluating a bank's Home Mortgage Disclosure Act (Regulation C) platform, which of the
following would be a concern?
A. Whether the data is complete and accurate
B. Whether the unique identifier is sequential
C. Whether the system includes unsecured loans
D. Whether the information is maintained for seven years - CORRECT ANSWER - A.
Whether the data is complete and accurate
Which concerns the compliance professional the MOST about a bank's performance when
preparing for a CRA examination?
A. Investments generally consist of simple traditional assets
B. Language services include commonly spoken languages
C. Lending includes mortgage loans from a nondepository affiliate
D. Branch expansion includes five new locations, two in low- and moderate-income geographies
- CORRECT ANSWER - A. Investments generally consist of simple traditional assets
In a review of procedures, which of the following poses the GREATEST risk?
A. The procedures contain factors used to determine exception approval
B. Requests for exceptions are tracked via an Excel spreadsheet
C. Exceptions are requested by loan officers rather than customers
D. The call center allows for a waiver of two service fees per year - CORRECT
ANSWER - C. Exceptions are requested by loan officers rather than customers
Which action on the part of the loan officer might be the basis for a violation of the Equal Credit
Opportunity Act?
, A. Not having a branch open on Saturdays
B. Failing to stand and shake the applicant's hand
C. Requiring all applications to be submitted in writing
D. Establishing a minimum income amount of $30,000 - CORRECT ANSWER - D.
Establishing a minimum income amount of $30,000
Who would benefit the MOST from training pertaining to the Children's Online Privacy
Protection Act?
A. Personal bankers
B. Mortgage lenders
C. Marketing staff
D. Technology team - CORRECT ANSWER - C. Marketing staff
What is the MOST important concept for mortgage officers to understand during training?
A. A loan purchase or loan participation does not trigger any flood requirements
B. Real estate loans must include a Standard Flood Hazard Determination Form
C. Draws against an equity line do not require a Standard Flood Hazard Determination Form
D. Flood insurance is available through the NFIP or directly through an insurance company -
CORRECT ANSWER - B. Real estate loans must include a Standard Flood Hazard
Determination Form
What is the FIRST thing a compliance professional should do when evaluating the impact of a
new regulation regarding privacy?
A. Identify the requirements that are new or different from existing requirements
B. Notify the key stakeholders and discuss the requirements of the new regulation
C. Design training for employees regarding the requirements of the new regulation
D. Update policies and procedures to include the new or changed requirements - CORRECT
ANSWER - A. Identify the requirements that are new or different from existing
requirement
ACTUAL Exam Questions and CORRECT
Answers
In which of the following situations is a bank required by federal regulation to verify and record
the identity of the customer?
a. An established customer asks to withdraw $5,000 from his checking account and asks that the
withdrawal be issued in the form of a cashier's check
b. An established customer purchases $2,000 worth of traveler's checks using cash to pay for the
purchase
c. An individual uses cash to purchase traveler's checks totaling $2,000 and, at the same time,
uses cash to purchase a cashier's check for $3,000
d. A customer deposits $6,000 in cash to her savings account - CORRECT ANSWER - c.
An individual uses cash to purchase traveler's checks totaling $2,000 and, at the same time, uses
cash to purchase a cashier's check for $3,000
A financial institution is establishing a new relationship with an insurance brokerage firm to
offer insurance products. The relationship was established with no involvement from the bank's
compliance department. Which action would BEST prevent a breakdown in compliance with
insurance sales regulations?
a. Reviewing applications for credit to ensure conditions for purchasing a life insurance policy
are included
b. Reviewing referral arrangements to ensure sales transactions include anti-coercion and
solicitation provisions
c. Reviewing disclosure requirements to ensure sales transactions by telephone include written
acknowledgment by consumers
d. Reviewing disclosure requirements to ensure sales transactions by mail include providing
disclosures orally to consumers - CORRECT ANSWER - b. Reviewing referral
arrangements to ensure sales transactions include anti-coercion and solicitation provisions
Which of the following is MOST concerning when reviewing quarterly Home Mortgage
Disclosure Act (Regulation C) reports?
,A. Bulk purchases are included in the report
B. The quarterly error rate is consistent with prior quarters
C. Commercial loans are excluded from the report
D. Preapprovals are included if part of a formal program - CORRECT ANSWER - C.
Commercial loans are excluded from the report
A new compliance professional learns that the bank submitted last year's CRA data and took six
months to correct all the mistakes. What is the BEST way to respond to this issue?
A. Develop a plan to start reviewing the current year's CRA data and monitor the errors and
come up with ways to prevent future errors
B. Develop a plan to first submit the current year's CRA data to get all the errors corrected in less
than six months next year
C. Develop a plan to start reviewing the current year's CRA data after December 31 and monitor
the errors and fix all the mistakes before the data is submitted
D. Develop a plan to start reviewing the current year's CRA data but wait until receiving an error
report to fix the errors - CORRECT ANSWER - A. Develop a plan to start reviewing the
current year's CRA data and monitor the errors and come up with ways to prevent future errors
Which three components compose the compliance risk assessment process?
A. Identifying compliance risk, evaluating the likelihood and impact of the risk, and evaluating
risk management controls
B. Identifying inherent risk, evaluating risk management controls, and measuring residual risk
C. Identifying inherent risk, evaluating the likelihood and impact of the risk, and measuring
residual risk
D. Identifying risk of consumer harm, evaluating risk management controls, and measuring
residual risk - CORRECT ANSWER - B. Identifying inherent risk, evaluating risk
management controls, and measuring residual risk
A compliance professional has been tasked with preparing the lines of business for an important
regulatory change. Which step should be taken FIRST?
A. Draft job-specific training to be delivered to impacted lines of business
B. Identify impacted lines of business and develop a team of key stakeholders
,C. Confirm readiness to implement revised guidance on the part of the bank's platform software
provider
D. Research, review, and then provide a summary of the impact to the lines of business -
CORRECT ANSWER - D. Research, review, and then provide a summary of the impact to
the lines of business
When evaluating a bank's Home Mortgage Disclosure Act (Regulation C) platform, which of the
following would be a concern?
A. Whether the data is complete and accurate
B. Whether the unique identifier is sequential
C. Whether the system includes unsecured loans
D. Whether the information is maintained for seven years - CORRECT ANSWER - A.
Whether the data is complete and accurate
Which concerns the compliance professional the MOST about a bank's performance when
preparing for a CRA examination?
A. Investments generally consist of simple traditional assets
B. Language services include commonly spoken languages
C. Lending includes mortgage loans from a nondepository affiliate
D. Branch expansion includes five new locations, two in low- and moderate-income geographies
- CORRECT ANSWER - A. Investments generally consist of simple traditional assets
In a review of procedures, which of the following poses the GREATEST risk?
A. The procedures contain factors used to determine exception approval
B. Requests for exceptions are tracked via an Excel spreadsheet
C. Exceptions are requested by loan officers rather than customers
D. The call center allows for a waiver of two service fees per year - CORRECT
ANSWER - C. Exceptions are requested by loan officers rather than customers
Which action on the part of the loan officer might be the basis for a violation of the Equal Credit
Opportunity Act?
, A. Not having a branch open on Saturdays
B. Failing to stand and shake the applicant's hand
C. Requiring all applications to be submitted in writing
D. Establishing a minimum income amount of $30,000 - CORRECT ANSWER - D.
Establishing a minimum income amount of $30,000
Who would benefit the MOST from training pertaining to the Children's Online Privacy
Protection Act?
A. Personal bankers
B. Mortgage lenders
C. Marketing staff
D. Technology team - CORRECT ANSWER - C. Marketing staff
What is the MOST important concept for mortgage officers to understand during training?
A. A loan purchase or loan participation does not trigger any flood requirements
B. Real estate loans must include a Standard Flood Hazard Determination Form
C. Draws against an equity line do not require a Standard Flood Hazard Determination Form
D. Flood insurance is available through the NFIP or directly through an insurance company -
CORRECT ANSWER - B. Real estate loans must include a Standard Flood Hazard
Determination Form
What is the FIRST thing a compliance professional should do when evaluating the impact of a
new regulation regarding privacy?
A. Identify the requirements that are new or different from existing requirements
B. Notify the key stakeholders and discuss the requirements of the new regulation
C. Design training for employees regarding the requirements of the new regulation
D. Update policies and procedures to include the new or changed requirements - CORRECT
ANSWER - A. Identify the requirements that are new or different from existing
requirement
