American Bankers Association CRCM Exam - Topic 2 Question 120 Discussion

Actual exam question for American Bankers Association's CRCM exam

Question #: 120
Topic #: 2

[All CRCM Questions]

State National Bank offers credit life and disability insurance on all consumer loans. This credit-related insurance is sold by a third party, but the bank collects a commission on all sales. The bank also sells hazard insurance through its affiliated insurance agency. Which of the following actions is legal for State National?

ARequire all consumers to purchase credit life insurance through the bank

BRequire only certain consumers to purchase credit life insurance through the bank

CRequire all borrowers with real property loans to provide insurance to protect the collateral

DRequire borrowers on real estate loans over $50,000 to purchase hazard insurance through the bank

Show Suggested Answer

Suggested Answer: C

by Ezekiel at Jan 05, 2026, 05:16 AM

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Marylin

3 days ago

A) Nah, that's too much. Forcing everyone to buy insurance? That's just shady.

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Lynna

8 days ago

D) Definitely the way to go. Gotta make sure those big loans are covered, you know?

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Dominque

13 days ago

C) Seems like the most reasonable option to me. Gotta protect that collateral, am I right?

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Andree

18 days ago

D feels tricky; I think there are regulations about requiring hazard insurance, but I can't recall the specifics.

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Rodolfo

24 days ago

C sounds legal since it's common for lenders to require insurance to protect their collateral, right?

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Venita

29 days ago

I’m not sure about B, but it seems like requiring only certain consumers could be a gray area.

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Jerry

1 month ago

I think I remember that banks can’t force all consumers to buy credit life insurance, so A might be illegal.

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Millie

1 month ago

This looks straightforward to me. The bank can require borrowers to have insurance to protect the collateral, but they can't force everyone to buy it from their own agency. I'll select the answer that aligns with that.

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Amber

1 month ago

I'm a little confused by all the different insurance requirements in this question. I'll need to review the material on credit-related insurance policies and regulations before I can feel confident answering this.

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Torie

2 months ago

Okay, let me see. The bank can't force everyone to buy credit life insurance through them, but they can require it for certain types of loans. And they can definitely require borrowers to have hazard insurance, but they can't force them to buy it from the bank's agency. I think I've got the right approach here.

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Ilona

2 months ago

Hmm, this is a tricky one. I'm not totally sure about the rules around credit life insurance and whether the bank can require it. I'll have to think this through carefully.

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Glenna

2 months ago

I think I know the answer to this one. The bank can require borrowers to have insurance to protect the collateral, but they can't force them to buy it through the bank's own insurance agency.

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