Federal Reserve Education

1.

The Truth in Lending Act requires banks to _______________________.

A.	Charge for services

B.	Disclose finance charges in advance

C.	Monitor account activity

D.	Limit fees for specialized accounts

2.

The Federal Reserve also has supervisory and regulatory responsibility for the international operations of its member banks.

True

False

3.

Federal Reserve Bank employees who are responsible for supervision and regulation of banks are called __________.

A.	Regulators

B.

Assessors

C.

Auditors

D.

Examiners

4.

This acronym represents the rating system used to evaluate banks.

A.

CASH

B.

SAFBNK

C.

CAMELS

D.

COST

5.

This one of the "5-Cs" refers to an applicant's assets minus their liabilities.

A.

Control

B.

Capital

C.

Capacity

D.

Condition

6.

Which of the following entities is NOT a bank regulator?

A.	Federal Deposit Insurance Corporation

B.	Office of Thrift Supervision

C.	Office of Currency Regulation

D.	Office of the Comptroller of Currency

7.

Which of the following would an examiner most likely use to evaluate a bank's compliance with the Community Reinvestment Act?

A.	Services rendered to the elderly

B.	Loans extended to small businesses

C.	Accounts held by entrepreneurs

D.	Loans extended to low-income communities

8.

Every financial institution is required to keep a certain percentage of deposits in reserve as cash in its vault or in an account at a Federal Reserve Bank. This is called ___________________.

A.	Reserve requirement

B.	Account percentage hold

C.	Deposit hold

D.	Security reserves

9.

This refers to a borrower's assets.

A.	Collateral

B.

Credit

C.

Character

D.

Condition

10.

This Act was passed by Congress in 1977 to ensure that banks practiced fair lending and deposit services in low- and moderate-income communities.

A.	Community Reinvestment Act

B.	Urban Community Act

C.	Inclusive Account Act

D.	Fair Banking Act

11.

Credit unions are not subject to the same supervision and regulation that banks are.

True

False

12.

Which of these does not fall within the Federal Reserve's enforcement policies in the case of a troubled or non-compliant institution?

A.	Purchase of the bank by the Federal Reserve

B.	Permanent ban from banking industry for bank official

C.	Assessment of a fine for the bank

D.	Removal of a bank officer

13.

Which of the following is NOT one of the "5-Cs" used to rate the quality of a loan?

A.

Character

B.	Culpability

C.

Capacity

D.	Collateral

14.

The main objective of the supervisory process is to evaluate the overall ____________ and ______________ of a banking organization.

A.	Security and liability

B.	Safety and soundness

C.	Investments and risk

D.	Diversity and loans

15.

Which of the following is NOT a primary objective of the Federal Reserve's banking supervision function?

A.	Requesting the correction of issues within a bank

B.	Ensuring bank compliance with regulations

C.	Assessing the capital limit each bank should target

D.	Monitoring the condition of banks