Certified Regulatory Compliance Manager (CRCM) — Question 123

First National Bank would like to adopt a recordkeeping system that complies with the requirements of Regulation O. Which of the following best describes the recordkeeping system required by Regulation O?

Answer options

• A. A system in which the bank annually surveys all executive officers of First National and its affiliates to determine the insiders' related interests
• B. A system in which the bank asks all borrowers as loans are made whether the borrower is a related interest of an insider
• C. A system that surveys insiders of First National annually and requires each insider to disclose his or her related interests
• D. A system that requires an annual survey of affiliate insiders

Correct answer: C

Explanation

The correct answer is C because Regulation O mandates that banks must annually survey their insiders and have them disclose any related interests. Options A and D do not encompass the requirement for insider disclosure, while option B focuses on borrowers rather than insiders, making them unsuitable descriptions of the recordkeeping system required by Regulation O.