Practice Test Geeks(CCM) Certified Credit Manager Practice Test
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Regulatory Compliance & Governance Flashcards

7 cards from real CCM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Regulatory Compliance & Governance flashcards as text

  1. Under the Uniform Commercial Code (UCC) Article 9, a secured creditor's priority over other creditors is generally established by:

    Answer: The date and time of perfection, typically by filing a financing statement

    Under UCC Article 9, priority among secured creditors is generally determined by the order of perfection, most commonly through the filing of a UCC-1 financing statement.

  2. Which of the following actions would trigger a mandatory SAR (Suspicious Activity Report) filing obligation for a financial institution?

    Answer: A transaction appears to involve funds from illegal activity with no lawful explanation

    SARs must be filed when a financial institution knows, suspects, or has reason to suspect that a transaction involves funds from illegal activity or is designed to evade reporting requirements.

  3. The Equal Credit Opportunity Act (ECOA) requires creditors to notify applicants of adverse action within how many days of receiving a completed credit application?

    Answer: 30 days

    ECOA requires creditors to notify applicants of adverse action within 30 days of receiving a completed credit application.

  4. A credit manager applies stricter credit terms to applicants from a specific zip code that correlates with minority neighborhoods. This practice is known as:

    Answer: Redlining

    Redlining refers to the discriminatory practice of denying or limiting financial services to residents of specific areas based on racial or ethnic composition, which violates ECOA and the Fair Housing Act.

  5. Under Basel III capital requirements, what is the minimum Common Equity Tier 1 (CET1) capital ratio that banks must maintain?

    Answer: 4.5%

    Basel III requires banks to maintain a minimum CET1 capital ratio of 4.5% of risk-weighted assets.

  6. Which of the following best describes the purpose of a credit policy's 'Know Your Customer' (KYC) requirement?

    Answer: To verify customer identity and assess money laundering and fraud risks

    KYC requirements are designed to verify customer identities, understand the nature of their business, and assess risks related to money laundering, terrorist financing, and fraud.

  7. When a publicly traded company's credit department discovers a material weakness in internal controls over financial reporting, what is required under SOX?

    Answer: Disclose it in the annual report (10-K) and management must assess its impact

    SOX Section 404 requires management to assess and disclose material weaknesses in internal controls over financial reporting in the company's annual 10-K filing.