Certified Regulatory Compliance Manager (CRCM) — Question 86

A bank's president would like to begin offering a new home equity line of credit product within two weeks. In all cases the borrower's principal dwelling will secure the loan. The president has already launched a planned advertising campaign for the bank's major service markets. What should the compliance professional do
FIRST?

Answer options

• A. Hire an attorney to write the appropriate legal documents and disclosures
• B. Write a memo to the president explaining why the compliance professional should have been in on the process at an earlier date
• C. Begin training sessions for the lending and loan operations staff on the compliance issues involved
• D. Perform a risk assessment to determine the bank's level of risk in offering this new product

Correct answer: D

Explanation

The correct answer is D because performing a risk assessment is essential to understand the potential risks associated with the new product before proceeding. Hiring an attorney (A) or writing a memo (B) could be important, but they are not the immediate priority. Training sessions (C) can follow once the risks have been assessed.