Commercial Banking Exam #1 Questions and Answers What are some examples of depository institutions that are not commercial banks? - Correct Answers ✅Credit unions, savings banks, and savings and loans banks What is the Intermediation role of commercial banks? - Correct Answers ✅The intermediation role is the channeling of funds from savers (depositors) to investors (borrowers) via bank loans.Dodd-Frank Wall Street Reform and Consumer Protection Act - Correct Answers ✅- Established the Consumer Financial Protection Bureau which examines consumer compliance for banks with assets in excess of $10 billion.
- Abolished the Office of Thrift supervision and moved that
- Raised the deposit insurance ceiling to $250,000.
- Made it where bank holding companies with over $50 billion
- Limited proprietary trading for banking entities.
- Control of the supply of money and credit.
- Ensure equal opportunity and fairness in access to credit.
- Avoid concentration of power. 1 / 3
supervision to the OCC.
in assets are subject to systemic risk oversight by the Fed.
What are some reasons for the regulation of banks? - Correct Answers ✅- To promote financial stability and to protect the public's savings.
Commercial Banking Exam #1 Questions and Answers The Banking Act of 1933 (Glass-Steagall Act) - Correct Answers ✅- Created the FDIC Insurance creates what kind of hazard? - Correct Answers ✅Moral Hazard Who are the 3 federal bank regulators? - Correct Answers ✅- Office of the Comptroller of Currency
- FDIC
- Federal Reserve
What is the CAMELS Examination rating? - Correct Answers ✅A rating of bank quality, rated 1-5, 1 being best. Banks receive both component and composite ratings.C- Capital Adequacy A- Asset quality M- Management quality E- Earnings L- Liquidity S- Sensitivity 2 / 3
Commercial Banking Exam #1 Questions and Answers Consumer Credit Protection Act (Truth-in-Lending) of 1968 - Correct Answers ✅States that financial firms must state customer's rights and report lending terms and rates consistently.Equal Credit Opportunity Act of 1974 - Correct Answers ✅Access to credit must be equivalent regardless of age, sex, race, etc.Community Reinvestment Act of 1977 - Correct Answers ✅Banks must serve customers in their market area and may not discriminate against customers in their neighborhoods by redlining.Check 21 Act - Correct Answers ✅Banks can electronically send check images rather than mailing in physical checks.What are the characteristics of a Community Bank? - Correct Answers ✅- Assets up to about $1B-5B
- Privately owned and managed by a board of directors.
- Geographically concentrated.
- Generally know their customers well.
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Unit Bank - Correct Answers ✅Community bank with just one office.