Question 1

Which of the following activities is NOT a permissible nonbanking activity?

Options :

A : Servicing mortgage loans

B : Providing general courier services to the businesses around the bank office

C : Providing mortgage loan data processing services to mortgage companies

D : Acting as a broker for credit life insurance

Answer: B

Question 2

Martha Smith of First National Bank is attempting to close a large commercial loan to a manufacturing equipment company. In negotiating the interest rate on the loan Martha states that if the company will move some of its demand accounts to the bank, it could get a lower interest rate. Is this wrong?

Options :

A : Yes. It violates the anti-tying provisions.

B : Yes. It is a restraint of trade.

C : No, unless moving the accounts is a condition of the loan..

D : No. The bank may condition the loan on the customer placing a deposit in the bank.

Answer: D

Question 3

Second National has decided to close one of its less profitable neighborhood branches. Which of the following actions is NOT required of the bank under federal law?

Options :

A : Publish a notice of the closing in the local newspaper

B : Send a notice to its regulatory agency

C : Send notices to the branch customers

D : Post a notice at the branch

Answer: A

Question 4

Your institution has identified a transaction by an existing depositor that should be blocked under

OFAC requirements. The branch manager contacts you for specific instructions. Before reporting the

transaction to OFAC, what should the bank do?

Options :

A : Reject the transaction

B : Process the transaction

C :

Close the customer’s account

D : Place the funds in an interest-bearing account

Answer: D

Question 5

When is it permissible for a bank that is a government securities broker or dealer to refrain from

filing a Form G-FIN-5 or a Form MSD-5 when an employee terminates the associated person status?

Options :

A : When the employee files the form

B :

When the bank does not have all the necessary information and notifies its regulatory agency

C :

When the employee’s status is reinstated within six months

D : When the employee remains employed by the bank and the bank notifies its regulatory agency

Answer: D