Banks must establish and maintain effective risk management and control processes over its DCCs and DSAs, including:
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A. B. C. D.ABC
CRCM stands for "Certified Regulatory Compliance Manager" and is a professional designation awarded to individuals who demonstrate expertise in the field of regulatory compliance. The question you provided is related to the compliance requirements for banks regarding their DCCs (Debit Card Cashback) and DSAs (Digital Savings Accounts).
The answer choices provided are all related to the effective risk management and control processes that banks are required to establish and maintain for their DCCs and DSAs. Let's go through each answer choice in detail:
A. Appropriate recognition and financial reporting of income, expenses, assets, and liabilities: This answer choice emphasizes the importance of accurate and appropriate financial reporting for the bank's DCCs and DSAs. It is important for the bank to accurately recognize income, expenses, assets, and liabilities related to these products to ensure transparency and compliance with accounting standards.
B. Appropriate treatment of losses associated with these products: This answer choice highlights the need for banks to appropriately manage and mitigate losses associated with their DCCs and DSAs. It is important for the bank to have effective risk management processes in place to identify and address potential losses before they become significant.
C. Assessment of the adequacy of its internal controls and risk mitigation activities: This answer choice emphasizes the importance of ongoing assessment and evaluation of the bank's internal controls and risk mitigation activities related to their DCCs and DSAs. The bank must have effective internal controls in place to prevent and detect potential risks associated with these products.
D. Before entering into a contract, the bank must obtain the customer's written affirmative election to enter into the contract and written acknowledgement of the receipt of the disclosures: This answer choice highlights the requirement for the bank to obtain the customer's affirmative election and acknowledgement of disclosures before entering into a contract for their DCCs and DSAs. This ensures that customers are fully aware of the terms and conditions associated with these products before they agree to them.
In summary, the compliance requirements for banks regarding their DCCs and DSAs include establishing and maintaining effective risk management and control processes, accurately recognizing financial reporting, appropriately treating losses, assessing the adequacy of internal controls, and obtaining customer's written affirmative election and acknowledgement of disclosures.