Certified Regulatory Compliance Manager (CRCM) — Question 58

It is an extension of credit will be deemed to be made to an insider if the proceeds are transferred to the insider or used for the insider's benefit. This rule does not apply if the credit is made on substantially the same terms and conditions as those made to a noninsider and if the proceeds are used in a bona fide transaction involving the acquisition of property, goods, or services from the insider. What is it?

Answer options

• A. Tangible economic benefit rule012 CFR 215.3(f)
• B. Extension of credit-12 CFR 215.3
• C. Lending restrictions
• D. Intangible economic-benefit rule

Correct answer: A

Explanation

The correct answer is A, as the Tangible economic benefit rule specifically addresses the conditions under which credit extended to insiders is evaluated. Options B and C do not capture this specific regulation's details, while option D refers to a different concept regarding non-physical benefits.