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American Bankers Association Exam CRCM Topic 1 Question 25 Discussion

Actual exam question for American Bankers Association's Certified Regulatory Compliance Manager exam
Question #: 25
Topic #: 1
[All Certified Regulatory Compliance Manager Questions]

Issuing Bank, a foreign bank, maintains an account with First National Bank, a U.S. bank. Issuing Bank issues a letter of credit in favor of ABC, Inc., a U.S. corporation. The letter of credit contains a boycott provision. The letter of credit provides that any negotiating bank may obtain reimbursement from Issuing Bank's account at First National Bank by certifying that the conditions of the letter of credit have been met. Issuing Bank does not send First National Bank a copy of the letter of credit. May First National Bank reimburse negotiating banks for the letter of credit when it contains a boycott provision?

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Suggested Answer: A


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