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Flashcards in Securities Deck (19):

A lender may not lead a consumer to believe that a loan is conditioned on either the purchase of insurance or an annuity from the bank or an affiliate, OR

an agreement by the consumer not to obtain insurance or an annuity from an unaffiliated entity


A bank may not engage in any practice or use any advertisement at any office of, or on behalf of, the bank that could mislead a consumer to believe that:

* the insurance is FDIC insured

* there is no investment risk, including the potential loss of principal

* a loan at the bank in conditioned on the purchase of insurance products

* the consumer is not free to purchase the insurance product from another source


Insurance sales disclosures must be provided before the completion of:

the initial sale of the insurance product or annuity to the consumer


All insurance product required disclosures must be provided:

orally AND in writing


Consumers must acknowledge insurance disclosures in writing, either electronically or in paper format, at the time:

the disclosure is received or the initial purchase is made


What disclosures are required in all advertisements for insurance products or annuities:

not a deposit, not FDIC insured, not insured by any federal agency, not guaranteed by the bank, may go down in value


The area where insurance products are sold must be:

physically segregated from areas where deposits are routinely accepted from the general public


Persons selling insurance products as bank employees or on behalf of the bank must be appropriately qualified and licensed under:

applicable state insurance licensing standards


Generally, banks should ensure that retail NDIP customers are fully informed as to:

the nature and risks associated with the investment


What are the minimum disclosure requirements for NDIP?

* not insured by FDIC

* not deposits or obligations of the institution

* not guaranteed by the bank

* subject to investment risk, including loss of principal


When should NDIP disclosures be provided?

* orally, during any sales presentation

* orally, when investment advice concerning NDIP is given

* orally and in writing before the opening of an investment account

* in all advertisements


NDIP disclosures must be acknowledged by customers in writing with a statement that:

the customer understands the disclosures


What is the allowed abbreviated advertising disclosure for NDIP?

Not FDIC insured, No Bank Guarantee, May Lose Value


A NDIP is not allowed to have a product name that:

is identical to the name of a depository institution


If the NDIP has a name similar to a retail banking product, it should be designed and presented in a sales program in a way that:

minimized the risk of confusion to the customer


Sales of NDIP in the premises of a bank should be conducted in:

a physical location separate from the retail deposit area


Persons who recommend NDIP to customers should have reasonable grounds to believe the product:

is suited to the needs of the customer, based on information provided by the customer


Persons who recommend NDIP must make reasonable efforts to obtain financial information that discloses the:

consumers tax status and investment objectives


A banks CMS should outline NDIP policies and procedures, including identifying conflicts of interest and specify:

how these conflicts will be handled