Exam CRCM topic 1 question 271 discussion

Actual exam question from ABA's CRCM

Question #: 271
Topic #: 1

First National Bank owns a data processing company that sells financially related data processing services to various businesses in the community. Daniel Tyler, a loan officer, is negotiating a loan to a local CPA firm. He would like to make the loan conditional on the CPA firm's use of the subsidiary data processing firm. May he do so?

A. Yes, because it is not a bank service.
B. Yes, because it is not related to pricing.
C. No. It is an illegal tie-in.
D. No, unless the company was planning to obtain a new data processing service provider anyway.

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Suggested Answer: C 🗳️

by Cam22 at March 17, 2024, 2:50 a.m.

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Cam22

4 months ago

Selected Answer: C

Daniel Tyler cannot make the loan conditional on the CPA firm's use of the subsidiary data processing firm. This would constitute an illegal tie-in, where the bank conditions the availability of one product or service (the loan) on the purchase of another product or service (data processing services from its subsidiary). Tie-in arrangements can violate antitrust laws, such as the Sherman Antitrust Act, by stifling competition and restricting consumer choice.

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Exam CRCM topic 1 question 271 discussion

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