CBA Regulatory Compliance Auditing 2 — Questions and Answers
Question 1: Under the Bank Secrecy Act (BSA), what is the minimum transaction amount that triggers a Currency Transaction Report (CTR)?
- $5,000
- $10,000 (Correct answer)
- $15,000
- $25,000
Correct answer: $10,000
The BSA requires banks to file a CTR for any cash transaction exceeding $10,000 in a single business day.
Question 2: Which regulatory body is primarily responsible for enforcing the Community Reinvestment Act (CRA) for national banks?
- FDIC
- Federal Reserve
- OCC (Correct answer)
- CFPB
Correct answer: OCC
The Office of the Comptroller of the Currency (OCC) is the primary federal regulator responsible for CRA examinations of national banks.
Question 3: A bank's compliance audit reveals that loan officers have been redlining minority neighborhoods. Which law is most directly violated?
- Truth in Lending Act
- Equal Credit Opportunity Act (Correct answer)
- Bank Secrecy Act
- Gramm-Leach-Bliley Act
Correct answer: Equal Credit Opportunity Act
Redlining violates the Equal Credit Opportunity Act (ECOA), which prohibits discrimination in credit decisions based on race or national origin.
Question 4: What does the term 'structuring' refer to in the context of BSA/AML compliance?
- Organizing loan portfolios by risk tier
- Breaking up transactions to avoid CTR reporting thresholds (Correct answer)
- Structuring internal audit teams by function
- Creating tiered customer due diligence levels
Correct answer: Breaking up transactions to avoid CTR reporting thresholds
Structuring (also called 'smurfing') is the illegal practice of breaking up large cash transactions to stay below the $10,000 CTR reporting threshold.
Question 5: Which examination rating system do federal banking regulators use to evaluate bank safety and soundness, including compliance components?
- PACE
- CAMELS (Correct answer)
- TIGER
- MERIT
Correct answer: CAMELS
CAMELS (Capital, Assets, Management, Earnings, Liquidity, Sensitivity) is the standardized examination rating system used by federal bank regulators.
Question 6: Under Regulation E, what is the maximum liability for a consumer who reports an unauthorized electronic funds transfer within 2 to 60 days of receiving their statement?
- $0
- $50
- $500 (Correct answer)
- Unlimited
Correct answer: $500
Under Regulation E, if the consumer reports within 2 to 60 days, liability is capped at $500 for unauthorized EFT transactions.
Question 7: A compliance auditor discovers that a bank failed to provide the required HMDA data to regulators. What is the primary risk this finding creates?
- Increased reserve requirements
- Regulatory sanctions and fair lending scrutiny (Correct answer)
- Automatic license revocation
- Mandatory capital raises
Correct answer: Regulatory sanctions and fair lending scrutiny
Failure to file Home Mortgage Disclosure Act (HMDA) data exposes banks to regulatory sanctions and heightened fair lending examination scrutiny.
CBA Regulatory Compliance Auditing 2
Under the Bank Secrecy Act (BSA), what is the minimum transaction amount that triggers a Currency Transaction Report (CTR)?