Question

6. Describe how and when a letter of credit is used?

7. Name the key elements in being a successful salesperson.

8. What are the three standards of the CRA for a bank?

9. In addition to banking laws, what regulation governs financial privacy?

10. You are a commercial loan officer in the process of working with a customer that wants to purchase a business ($200,000 sale price for a coffee shop in Cotati). The problem is, the business acquisition has no real estate and your borrower has only 10% cash for the purchase. This is a cross-selling opportunity.

To cultivate the relationship, try to determine the following:

Product

Features

Benefits

Answer 1

6) Letter of credit is a payment method used to discharge the legal obligations for payment from the buyer to the seller, by having a bank pay the seller directly. Thus, the seller relies on the credit risk of the bank, rather than the buyer, to receive payment.

7)

• Ability to Listen
• Empathy
• Hunger
• Competitiveness
• Networking Ability
• Confidence
• Enthusiasm
• Resiliency

8) there are three very specific ways in which the CRA nudged Countrywide and other mortgage companies to adopt lax lending standards.

1. The Creation Of Artificial Demand For Low-Income Mortgages. Banks that were regulated by the CRA often found it difficult to meet their obligations under the CRA directly. Long standing lending practices by local loan officers were a big problem. But as banks expanded their deposit bases and other businesses, they often found that they were at risk of regulators discovering they had fallen behind in making CRA loans.
2. The Threat Of Regulation Is Often As Good As Regulation. It is highly misleading to claim that just because mortgage companies were not technically under the CRA that they were not required by regulators to meet similar tests. In fact, regulators threatened that if the mortgage companies didn't step up to the plate by relaxing lending standards they would be brought under the CRA umbrella and required to do so.
3. The CRA Distorted the Mortgage Market. With banks offering mortgages with high loan to value, delayed payment schedules and other enticing features, the mortgage companies would have quickly found themselves unable to compete if they didn't offer similar loans. The requirement to offer risky loans from banks created a situation where other lenders found they had to offer similar products if they wanted to expand their business.

10) Financial privacy laws regulate the manner in which financial institutions handle the nonpublic financial information of consumers. In the United States, financial privacy is regulated through laws enacted at the federal and state level. Federal regulations are primarily represented by the Bank Secrecy Act, Right to Financial Privacy Act, the Gramm-Leach-Bliley Act, and the Fair Credit Reporting Act. Provisions within other laws like the Credit and Debit Card Receipt Clarification Act of 2007 as well as the Electronic Funds Transfer Act also contribute to financial privacy in the United States. State regulations vary from state to state.