Certified Regulatory Compliance Manager (CRCM) — Question 141

When helping a loan officer determine whether the bank must give a written adverse action notice to a business loan applicant, what should the compliance officer consider?

Answer options

• A. Current net income
• B. Gross revenue for the preceding year
• C. Length of time the applicant has been in business
• D. Type of business entity (that is, corporation, partnership, or sole proprietorship)

Correct answer: B

Explanation

The correct answer is B because gross revenue for the preceding year is a critical factor in assessing the financial viability of a business, which directly impacts lending decisions. The other options, while relevant to the applicant's profile, do not provide the same level of insight into the applicant's ability to repay the loan.