Compliance Management Flashcards
What are the important elements of a compliance management system?
Policies and procedures
Monitoring
Training
Consumer complaint responses
Playful monkeys throw coconuts.
Policies / Monitoring / Training / Complaints
The job responsibilities of a newly hired compliance officer include review of all bank advertising. This review has never been done before. Which of the following actions is MOST appropriate for the new compliance officer to take FIRST?
A. Discontinue all advertising and suspend payment of vendors until the review is complete
B. Conduct an audit of Marketing Department and report the findings to the board of directors
C. Discuss future advertising plans with management
D. Inform the marketing department that all current and future advertising material will be reviewed by the Compliance Officer prior to publication
D. Inform the marketing department that all current and future advertising material will be reviewed by the Compliance Officer prior to publication
You learn that your bank has created a report of all deposit and loan customers. Presumed gender and ethnicity for each customer has been assigned based on customer first and/or last names. You should tell management that they:
A. Must destroy the report because of fair lending concerns
B. May provide the report to a third party vendor who is using it to determine who will receive a flyer about home equity loans
C. Must provide the report to an affiliate for marketing purposes
D. May use the report to conduct an internal fair lending review
D. May use the report to conduct an internal fair lending review
The compliance professional has been asked by management to participate in due diligence efforts for the bank’s vendors. Which of the following would be considered a vendor relationship that would be subject to these reviews?
A. An off-site records storage firm that stores internal bank paper records
B. The bank’s relationships with its corporate customers
C. A real estate agency that shares space with one of the bank’s branches
D. The United States Internal Revenue Service
A. An off-site records storage firm that stores internal bank paper records
Off-site records storage vendors are the only ones listed here performing business incidents to the business of banking. Customer relationships, third parties sharing real estate, and the IRS are not third parties involved in assisting banks in the business of banking.
A financial institution plans to introduce a new package of services that will include deposit accounts, investment services, credit products, and electronic banking. You are included on the project committee to develop and implement this package. Which of the following is the MOST appropriate role for you, as the compliance officer, on this committee?
A. Voicing opinions on pricing and features of the package
B. Informing the committee that bank and investment products cannot be packaged together
C. Keeping informed about the package so that compliance can be monitored once the package is implemented
D. Advising the committee on disclosure requirements, regulatory limitations, and liability provisions affecting the package
D. Advising the committee on disclosure requirements, regulatory limitations, and liability provisions affecting the package
Typically it is the compliance officer’s role to provide the compliance expertise and assist management in making the decision about how to proceed, but not tell management it can’t be done. Plus, there should be a workable way to put a package of bank and investment products together with the proper disclosures and disclaimers and appropriate segregation of duties.
The compliance officer is preparing the bank’s compliance risk assessment. In determining how serious to evaluate intentional violations of law or regulation, which of the following is a CORRECT statement?
A. Intentional violations of law or regulation may be assessed a civil money penalty under Tier 1 of the FIRREA civil money penalty provisions
B. Intentional violations of law or regulation may be assessed a civil money penalty under Tier 2 of the FIRREA civil money penalty provisions
C. Intentional violations of law or regulation may be assessed a civil money penalty under Tier 3 of the FIRREA civil money penalty provisions
D. The bank could be stripped of its FDIC insurance coverage by the United States Department of Justice
C. Intentional violations of law or regulation may be assessed a civil money penalty under Tier 3 of the FIRREA civil money penalty provisions
Intentional violations are eligible for Tier 3 penalties under FIRREA. The FDIC is responsible for deposit insurance coverage, not the Department of Justice.
You have recently joined a financial institution and are asked to review the products and services for compliance. You discover that one of the lobby brochures for a deposit product does not include important required disclosures. Which of the following actions should you take FIRST?
A. Draft revisions to the notice to bring it into compliance
B. Notify management of the problem with the brochure and the risks involved with its use
C. Notify management that use of this brochure must be discontinued immediately
D. Notify management that corrected brochures need to be sent to affected customers as soon as possible
B. Notify management of the problem with the brochure and the risks involved with its use
