American Bankers Association CRCM Exam - Topic 7 Question 113 Discussion

Actual exam question for American Bankers Association's CRCM exam

Question #: 113
Topic #: 7

When may a bank pay an overdraft of $5,000 created by an executive officer of the bank?

AWhen the officer is at the level of a vice president or lower.

BWhen the officer has previously signed an overdraft protection credit agreement in an amount sufficient to cover the overdraft.

CWhen the officer has enough funds in another account to cover the overdraft.

DWhen the bank pays the overdrafts for other good customers in the ordinary course of business.

Show Suggested Answer

Suggested Answer: B

by Mee at Jul 09, 2025, 06:53 AM

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Dylan

5 months ago

C makes sense, but it’s not always that simple.

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Gaynell

5 months ago

Wait, can they really pay overdrafts like that? Sounds risky.

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Tequila

5 months ago

I think it's B, they need that agreement to cover it.

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Ruth

6 months ago

Definitely not A, that seems too lenient!

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Jovita

6 months ago

D is just a bad idea, can't treat everyone the same!

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Anika

6 months ago

I think D is more about general practices, so it probably doesn't apply here. I remember a question like this in practice that focused on specific agreements.

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Valda

6 months ago

I feel like C could be a possibility too, but I don't know if it applies to executive officers specifically.

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Zana

7 months ago

I remember something about overdrafts being tricky for executive officers, but I can't recall if it was about their position or the agreement they signed.

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King

7 months ago

I think the answer might be B, but I'm not entirely sure if the overdraft protection agreement needs to be specific to that amount.

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Irving

7 months ago

This is a tricky one. I'll need to draw on my knowledge of banking regulations and really consider the nuances of each option before making a selection.

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Daryl

7 months ago

I'm pretty confident I know the right answer here. The regulations are clear that banks can only pay an executive officer's overdraft under certain limited circumstances.

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Lorrine

7 months ago

Okay, I think I've got a strategy here. I'll focus on the specific conditions mentioned in the answer choices and try to determine which one aligns with the legal requirements.

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Ivette

7 months ago

Hmm, I'm a bit unsure about this one. I'll need to carefully review the options and think through the regulations around bank overdrafts for executive officers.

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Leatha

8 months ago

This question seems straightforward, but I want to make sure I understand the key details before selecting an answer.

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Jarvis

10 months ago

I think it's important for the bank to have clear guidelines on when they can pay overdrafts to avoid any potential conflicts of interest.

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Katina

10 months ago

Ha! Looks like the executives are trying to pull a fast one. Option B is the way to go - keep those overdrafts in check!

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Evan

10 months ago

That's a good point, Ira. Having a signed agreement in place would give the bank more assurance.

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Ira

10 months ago

I believe the bank can also pay the overdraft if the officer has previously signed an overdraft protection credit agreement.

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Nicholle

10 months ago

D is tempting, but I doubt banks can just pay any customer's overdrafts like that. Seems a bit too lenient, even for executives.

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Ilona

8 months ago

I agree, D does seem a bit too lenient. It's important for banks to have strict policies in place.

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Audria

8 months ago

C) When the officer has enough funds in another account to cover the overdraft.

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Maynard

9 months ago

A) When the officer is at the level of a vice president or lower.

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Jarvis

10 months ago

I agree with you, Evan. It makes sense for the bank to cover the overdraft if the officer has the funds elsewhere.

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Carin

10 months ago

I'd go with C. The officer should have enough funds in another account to cover the overdraft. Letting executives overdraw willy-nilly is a recipe for disaster!

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