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Exam CRCM topic 1 question 286 discussion

Actual exam question from ABA's CRCM
Question #: 286
Topic #: 1
[All CRCM Questions]

ACME national bank plans to acquire Smith Brothers insurance agency and make it an operating subsidiary of the bank. ACME is considered a well-managed and adequately capitalized bank. What regulatory-related action must ACME take to obtain the agency?

  • A. Complete the sale of the agency and notify the OCC within 10 days
  • B. Complete the sale of the agency and notify the OCC within 30 days
  • C. No regulatory notice is required
  • D. Notify the OCC before completing the sale
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Suggested Answer: D 🗳️
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Cam22
4 months, 1 week ago
Selected Answer: D
When a bank like ACME plans to acquire an insurance agency (or any non-banking entity) and make it an operating subsidiary, regulatory approval and notice are generally required. The Office of the Comptroller of the Currency (OCC) is the primary regulator of national banks in the United States. The OCC requires that banks notify them and, in some cases, obtain approval before completing the acquisition of a non-bank entity. This process ensures that the acquisition does not pose undue risks to the bank's safety and soundness, complies with statutory and regulatory limitations, and is consistent with sound banking practices. This regulatory oversight helps maintain the stability and integrity of the banking system. Thus, the appropriate action for ACME, considered a well-managed and adequately capitalized bank, is to notify the OCC before completing the sale of Smith Brothers insurance agency to ensure compliance with applicable laws and regulations.
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