American Bankers Association American Bankers Association Certifications CRCM Questions & Answers

• Question 41:

  Which one of the following should be included in an early termination notice in case of the termination from consumer leasing agreement?

  A. A warning to the consumer that a substantial charge may result from early termination (required only in a motor vehicle lease)

  B. A statement of the conditions under which the lessee or lessor may terminate the lease prior to the end of the lease term

  C. The purchase option at the end of the lease term

  D. The amount of any penalty or other charge for early termination (the penalty must be reasonable)

  Correct Answer: ABD

• Question 42:

  In Consumer Leasing Act Content of non-segregated disclosures may be made separately or as part of another document (such as the lease agreement); however, other information cannot be stated, used, or placed so as to mislead or confuse the consumer. Other disclosures include all of the following EXCEPT:

  A. A statement of the conditions under which the lessee or lessor may terminate the lease before the end of the lease term, along with the amount (or a description of the method of how the amount is determined) of any penalty or other charge for early termination

  B. Whether the lessee has the option to purchase the leased property during the lease term and, if applicable, the purchase price (or method for determining it) and when the lessee may exercise it

  C. The lessee's right to an independent appraisal of the property if the lessee's liability at the end of the lease is based on the realized value of the leased property, and that the appraisal will be binding on all parties

  D. A statement of maintenance responsibilities including the counter bank responsible and a description of the responsibility

  Correct Answer: D

• Question 43:

  Under Renegotiations, extensions, and assumptions-12 CFR 213.5; any lease that is renegotiated or extended by longer than six months is considered to be a new lease, subject to new disclosure requirements, except when:

  A. One or more payments are deferred, whether or not there is a charge for the deferral

  B. Lease property is substituted with property of substantially equivalent or greater value, if no other lease terms are changed

  C. In a multiple-item lease, property is added, deleted, or substituted provided the average periodic payment does not change by more than 35 percent

  D. There is an agreement resulting from a pre-order

  Correct Answer: AB

• Question 44:

  In Advertising-12 CFR 213.7, if a percentage rate is used in an advertisement, it cannot be more prominent than any other disclosure, EXCEPT:

  A. For the warning regarding the limitation of the rate as a measurement of cost

  B. For beginning at least 3 days before and ending at least 10 days after the broadcast

  C. For required disclosures in advertisements

  D. For an advertisement accessed in electronic form

  Correct Answer: A

• Question 45:

  Under Consumer Leasing Act Enforcement-15 USC 1667d section FIRREA penalties include:

  A. Penalties up to $8,500 per day for violations of laws and regulations

  B. Penalties up to $37,500 per day if violations or unsafe or unsound practices are engaged in recklessly or are part of a pattern of misconduct that causes more than a minimal loss to the bank or any pecuniary gain to the parties involved

  C. Penalties up to $1,375,000 per day against persons who knowingly commit a violation and knowingly or recklessly cause a substantial loss to the bank or a substantial benefit to the party

  D. Penalties up to $9,500 per day for violations of laws and regulations

  Correct Answer: AB

• Question 46:

  requires that a statement of purpose be obtained from borrowers whose loans are to be greater than $100,000 and that will be secured by margin stock. Loans made for the purpose of purchasing margin stock are subject to additional limitations.

  A. Regulation U

  B. Regulation V

  C. Regulation Z

  D. Regulation X

  Correct Answer: A

• Question 47:

  An exempted borrower is a member of a national securities exchange or a registered broker or dealer who:

  A. Maintains at least 1,000 active accounts annually for persons other than brokers, dealers, and persons associated with brokers and dealers

  B. Earns at least $10 million in gross revenues on an annual basis from transactions with persons other than brokers, dealers, and persons associated with brokers and dealers, or

  C. Earns at least 10 percent of its gross revenues on an annual basis from transactions with persons other than brokers, dealers, and persons associated with brokers and dealers

  D. None of these

  Correct Answer: ABC

• Question 48:

  Banks may extend and maintain purpose credit without complying with Regulation U if the credit is extended:

  A. To a bank auditor

  B. To a qualified employee stock ownership plan running previously but not now

  C. To any customer, other than a broker or dealer, to temporarily finance the purchase or sale of securities for prompt delivery, if the credit is to be repaid in the ordinary course of business on the completion of the transaction

  D. To enable a customer to meet emergency expenses not reasonably foreseen and if the bank obtains a good faith statement from the customer. Emergency expenses are ones related to unforeseen death or disability, not a chance to make a profit.

  Correct Answer: CD

• Question 49:

  Margin stock includes:

  A. Equity securities registered or having delisted trading privileges on a national securities exchange:

  B. Over-the-counter (OTC) securities that do not qualify for trading in the National Market System

  C. Warrants or rights to subscribe to or purchase a common stock

  D. Securities issued by a investment company registered under the Investment Company Act, except for: A company licensed under the Small Business Investment Company Act A company that has at least 95 percent of its assets continuously invested in exempted securities A company that issues face-amount certificates A company that is considered a money market fund under the SEC Rules

  Correct Answer: D

• Question 50:

  Purpose credit is credit for all of the following EXCEPT:

  A. Immediate purpose of purchasing or carrying margin stock

  B. Incidental purpose of purchasing or carrying margin stock

  C. Ultimate purpose of purchasing or carrying margin stock

  D. Accidental purpose of purchasing or carrying margin stock

  Correct Answer: D