Bank Subsidiaries and Affiliates Organizational Structure Quiz

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According to Regulation B, who can be deemed a “Creditor” under the Equal Credit Opportunity Act (ECOA)?

A person who has knowledge of a violation after becoming involved in the credit transaction

A person who refers applicants to creditors

A person who regularly participates in a credit decision and sets the terms of the credit (correct)

A person who honors a credit card in a credit transaction

When is a person not considered a “Creditor” regarding any violation of ECOA committed by another “Creditor”?

When the person is not directly involved in the credit transaction

When the person reports the violation to the appropriate Federal agency

When the person knew or had reasonable notice of the act, policy, or practice that constituted the violation before becoming involved in the credit transaction (correct)

When the person is an affiliate of the original creditor

What should FDIC examiners do if an affiliate is deemed to be an Institution-Affiliated Party (IAP)?

Refer the case to the appropriate Federal agency with primary enforcement responsibility

Enter the violation in FOCUS for further investigation

Cite the violation in the Report of Examination (ROE) and consider enforcement action against the IAP directly (correct)

Include appropriate comments on the Examiner’s Comments page of the ROE

What does Section 10(b)(5)(B) of the FDI Act require FDIC examiners to do?

Make a full and detailed report of condition of any insured depository institution or affiliate examined to the Corporation Signup and view all the answers

What should be included in situations where an affiliate is not an Institution-Affiliated Party (IAP)?

A summary at the top of the Violations page explaining that because the entity is not an IAP, the matter will be referred to the appropriate Federal agency with primary enforcement jurisdiction over it Signup and view all the answers

What does Regulation B state regarding a person whose only participation in a credit transaction involves honoring a credit card?

That person is not considered a 'Creditor' Signup and view all the answers

Which documents are required to show the relationship between the holding company, the bank, and the affiliate?

Entity formation documents for the affiliate (Articles of Incorporation and Bylaws) Signup and view all the answers

In cases of potential fair lending violation by an affiliate not deemed an IAP, who must determine if the bank is liable?

FDIC Signup and view all the answers

What must be sent to both the bank and the affiliate if a 15-day letter is appropriate due to a review finding a violation?

A 15-day letter informing them of the preliminary finding Signup and view all the answers

What is required to determine the bank's potential liability for loans originated by the affiliate?

Investor contracts, including Investor Lock Agreements, Loan Sale Agreements and Guarantees with investors Signup and view all the answers

What type of agreements should reflect shared source of funding between entities?

Line-of-credit agreements with the bank or any entities with which the bank and/or affiliate both have credit lines Signup and view all the answers

What is necessary to understand how the relationship between the two entities works in practice?

Interview notes with bank management and the affiliate about their relationship Signup and view all the answers

In addition to organizational charts, what else is needed to show the relationship between the holding company, bank, and affiliate?

Officer and Director lists for bank and affiliate Signup and view all the answers

If a violation has occurred at an affiliate, who should be informed if a 15-day letter is appropriate?

Both the bank and the affiliate Signup and view all the answers

Bank Subsidiaries and Affiliates Organizational Structure Quiz

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