Examice

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Question 121

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

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

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

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

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

Correct Answer: B

A bank may pay an overdraft of $5,000 created by an executive officer only when the officer has previously signed an overdraft protection credit agreement in an amount sufficient to cover the overdraft. This ensures that there is a formalized and authorized plan in place to manage such situations, aligning with regulatory guidelines and the bank's policies.

Discussion

Cam22Option: B

B is correct