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Exam CRCM topic 1 question 19 discussion

Actual exam question from ABA's CRCM
Question #: 19
Topic #: 1
[All CRCM Questions]

The purpose of guidelines for National Banks to Guard against Predatory and Abusive Lending Practices- AL-2003-2 includes all of the following EXCEPT:

  • A. Provide examples to national banks of practices that may be abusive
  • B. Advise banks on how they should avoid abusive practices
  • C. Banks should consider appropriate discount rates, credit loss rates, and prepayment rates when valuing these assets
  • D. Show how some abusive lending can involve unfair or deceptive practices and therefore violate the Federal Trade Commission Act
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Suggested Answer: C 🗳️

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Cam22
4 months ago
This option does not directly relate to the primary purpose of the guidelines outlined in AL-2003-2, which focuses on guarding against predatory and abusive lending practices. The guidelines aim to provide examples of potentially abusive practices, advise on avoidance of such practices, and explain how abusive lending can violate regulations like the Federal Trade Commission Act. The consideration of discount rates, credit loss rates, and prepayment rates when valuing assets is more pertinent to financial management and accounting practices than to the specific focus on preventing predatory and abusive lending.
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JessyJazz24
9 months, 2 weeks ago
Selected Answer: C
You will be rewarded for being a great asset to management
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