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Free CCO Practice Questions

10 free, exam-style Certified Cannabis Compliance Officer (CCO) practice questions with answers and explanations. No signup required. Work through them below, then take the full free CCO practice test to study every exam domain.

Question 1

What is the PRIMARY characteristic that distinguishes a credit union from a commercial bank?

  1. Credit unions are member-owned, not-for-profit cooperatives
  2. Credit unions are insured by the FDIC
  3. Credit unions cannot offer checking accounts
  4. Credit unions are regulated exclusively by state agencies
Show answer & explanation

Correct answer: A - Credit unions are member-owned, not-for-profit cooperatives

Question 2

Under which section of the Internal Revenue Code are federal credit unions exempt from federal income taxes?

  1. Section 501(c)(1)
  2. Section 501(c)(3)
  3. Section 501(c)(6)
  4. Section 401(k)
Show answer & explanation

Correct answer: A - Section 501(c)(1)

Question 3

A credit union serves three separate employer groups, each with its own common bond. This credit union most likely holds which type of charter?

  1. Multiple common bond charter
  2. Single common bond charter
  3. Community charter
  4. Associational charter
Show answer & explanation

Correct answer: A - Multiple common bond charter

Question 4

A credit union wants to serve everyone living and working within a defined geographic area. Which field of membership type would this require?

  1. Single common bond
  2. Multiple common bond
  3. Community charter
  4. Occupational common bond
Show answer & explanation

Correct answer: C - Community charter

Question 5

Under a single common bond charter, what must all members of the credit union share?

  1. One occupational or associational bond
  2. A geographic residence within the same county
  3. Membership in the same trade association
  4. Employment at the same company or same industry
Show answer & explanation

Correct answer: A - One occupational or associational bond

Question 6

Federal credit unions are exempt from federal and state income taxes and franchise taxes. However, they ARE subject to:

  1. Real property and personal property taxes
  2. All federal excise taxes
  3. Capital gains taxes on investment income
  4. State sales taxes on member services
Show answer & explanation

Correct answer: A - Real property and personal property taxes

Question 7

A multiple common bond credit union wants to add a new select employee group (SEG). Which agency must approve this field of membership expansion?

  1. The Federal Reserve Board
  2. The Consumer Financial Protection Bureau
  3. The National Credit Union Administration
  4. The state banking department
Show answer & explanation

Correct answer: C - The National Credit Union Administration

Question 8

NCUA Part 721 grants federal credit unions what authority?

  1. Incidental powers to engage in activities reasonably necessary to carry out business
  2. Authority to offer insurance products directly to members
  3. Authority to operate branches in any state without approval
  4. Authority to make commercial loans without limitation
Show answer & explanation

Correct answer: A - Incidental powers to engage in activities reasonably necessary to carry out business

Question 9

A federal credit union has a statutory lien on member shares. This means the credit union:

  1. Can place a hold on member shares to cover delinquent loan obligations
  2. Must report all member share balances to the IRS annually
  3. Must obtain a court order before offsetting shares against debt
  4. Cannot use member shares as collateral for any loan product
Show answer & explanation

Correct answer: A - Can place a hold on member shares to cover delinquent loan obligations

Question 10

Under the dual chartering system, a state-chartered credit union that obtains federal share insurance is examined by:

  1. Only the NCUA
  2. Only the state regulator
  3. Primarily the state regulator, though NCUA retains the right to examine
  4. The CFPB for all consumer compliance matters
Show answer & explanation

Correct answer: C - Primarily the state regulator, though NCUA retains the right to examine

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