ORE Reg Branching

Question 1

Bad Debts

Answer 1

Matured obligations due a bank on which the interest is past due and unpaid for 6 months, unless the debts are well secured and in the process of collection

Question 2

Methods a bank may use to remove a borrower and acquire ownership of the property?

Answer 2

Deed-in-Lieu of forclosure and forclosure

Question 3

ORE should be recorded on the bank’s balance sheet as?

Answer 3

Fair value minus the cost to sell

Question 4

What is it called when ORE is acquired by lender in satisfaction or partial satisfaction of a debt and held until sold?

Answer 4

Debts previously contracted

Question 5

Most common methods used when bank finances ORE.

Answer 5

Full Accrual - bank may recognize immediately entire profit. Deposit Method - requires cash received as a down payment to be accounted for as a liability.

Question 6

Legal proceeding governed by the individual state’s statutory law?

Answer 6

Forclosure

Question 7

These ORE expenses may be capitalized

Answer 7

If property is under contruction, tax and insurance. Also, legal fees paid for purposes that clearly enhance value of property.

Question 8

SFAS 66 down payment requirements

Answer 8

Land 20 - 25% Commercial & Industrial 10 - 25% Multifamily Residential 10 - 25% Single Family Residential 5 - 10%

Question 9

This instrument helps establish the legal holding period of ORE.

Answer 9

Deed

Question 10

Reg Z

Answer 10

Truth in lending act - Pertains to credit term disclosures that creditors must provide to consumer loan borrowers.

Question 11

Reg H

Answer 11

Flood Disaster Protection Act - State Member Banks may not make loans secured by property located in special flood hazard area unless the property is covered by flood insurance.

Question 12

Reg X

Answer 12

Real Estate Settlement Procedures Act - Requires lenders to provide borrowers with disclosures regarding the nature and cost of real estate settlement process.

Question 13

Reg DD

Answer 13

Truth in Savings Act - created to help consumers make better informed decision about accounts at depository institutions through use of uniform disclosures.

Question 14

Reg CC

Answer 14

Expedited Funds Availability Act - passed to ensure that banks don’t hold deposit fund for excessive periods of time.

Question 15

Reg E

Answer 15

Electronic Funds Transfer Act - enacted to ensure that consumers are treated fairly when conducting ATM transactions or pre-authorized debit/credits

Question 16

Reg P

Answer 16

Privacy of Consumer Financial Info - Reg P implements the regulatory requirements of the GLBA privacy provisions. Requires institutions to provide privacy notices to consumers.

Question 17

Reg B

Answer 17

Equal Credit Opportunity Act - prevents discrimination in lending because of a person’s race, religion, gender, ageetc.

Question 18

Section 109 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994

Answer 18

prohibits any bank from establishing or acquiring a branch or branches outside of its home state primarily for the purpose of deposit production.

Question 19

Section 109 Testing

Answer 19

1. bank’s statewide loan-to-deposit ratio is compared w/the host state loan to deposit ratio (at least one-half to comply) 2. determining whether the bank is reasonably helping to meet the creditneeds of the communities served by its interstatebranches