0538452803_269402 - its market area This area must be...

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BLTC-9e Sample Answer for End-of-Chapter Hypothetical Question with Sample Answer Chapter 23: Checks and Banking in the Digital Age 23–2 Hypothetical Question with Sample Answer iBank operates exclusively on the Web with no physical branch offices. Although some of iBank’s business is transacted with smart-card technology, most of its business with its customers is conducted through the mail. iBank offers free checking, no-fee money market accounts, mortgage refinancing, and other services. With what regulation covering banks might iBank find it difficult to comply, and what is the difficulty? Sample Answer: Under the Home Mortgage Disclosure Act and the Community Reinvestment Act of 1977, to prevent discrimination in lending practices a bank is required to define
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Unformatted text preview: its market area. This area must be established contiguous to the bank’s branch offices. It must be mapped using the existing boundaries of the counties or the standard metropolitan areas in which the offices are located. A bank must delineate the community served, and annually review this delineation. The issue here is how a successful Internet-only bank could delineate its community. Does an Internet bank have a physically limited market area or serve a physically distinct community? Will the Federal Reserve Board, the government agency charged with enforcing this law, allow a bank to describe its market area as a “cybercommunity”?...
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