Certified Regulatory Compliance Manager (CRCM) — Question 63

This is a loan term or an arrangement that modifies a loan term under which a bank agrees to cancel all or part of a customer's loan obligation on the occurrence of a specified event. It may be included as a part of the loan documents, or it may be a separate agreement. What is it?

Answer options

• A. Debt suspension agreement (DSA)
• B. Anti-dying
• C. Debt cancellation contract (DCC)
• D. ALLL

Correct answer: C

Explanation

The correct answer is C, Debt cancellation contract (DCC), which directly refers to the agreement allowing the cancellation of debt under certain conditions. Option A, Debt suspension agreement (DSA), does not specifically entail cancellation but rather a temporary pause in payments. Option B, Anti-dying, is not related to loan terms, and D, ALLL, stands for Allowance for Loan and Lease Losses, which is an accounting term unrelated to the modification of loan obligations.