Bank Secrecy Act/Anti-Money Laundering (BSA/AML)

Question 1

Bank Secrecy Act/Anti-Money Laundering (BSA/AML) purpose

Answer 1

• Prevent the U.S. financial services industry from being used for money laundering.
• Enforced by FinCEN (Financial Crimes Enforcement Network).

Goals of the BSA:

• Prevent and detect money laundering and criminal activity financing.
• Document large currency transactions.
• Improve reporting and aid investigations of financial crimes

Question 2

Suspicious Activity Reports (SARs)

When to File a SAR:

• Known or suspected criminal offenses or transactions of $5,000 or more.

-Reportable Activities:
- Criminal violations involving insiders.
- Transactions aggregating $5,000 or more with identified _________.
- Transactions aggregating $________ or more without identified suspects.
- Transactions potentially involving money laundering, terrorism financing, or designed to evade the BSA.

Answer 2

suspects

$25,000

Question 2

Currency Transaction Report (CTR): Report single or structured transactions exceeding $___________

Answer 2

$10,000

Question 3

Negotiable Instrument Purchases: Record purchases between $3,000 and $10,000? True or False

Answer 3

True

Question 4

Suspicious Activity Report (SAR): Report suspicious transactions of $5,000 or more? T/F

Answer 4

True

Question 5

Wire Transfers: Record transfers exceeding $3,000? T/F

Answer 5

True

Question 6

Filing SARs:

Deadline: File within ____ calendar days of initial detection.
- E-Filing System: Use the SAR Form 111 through the BSA E-Filing System.

Answer 6

30 calendar days

Question 7

Parts of SAR Form 111:

Answer 7

• Part I: Subject Information.
  
  • Part II: Suspicious Activity Information.
  • Part III: Information about the Financial Institution.
  • Part IV: Filing Institution Contact Information.
  • Part V: Narrative.

Question 8

Maintain a copy of the SAR and supporting documentation for ____ years.

Answer 8

5 years

Question 9

What is the primary purpose of the Bank Secrecy Act (BSA)?
- a) Regulate interest rates on loans
- b) Prevent money laundering and detect criminal activity financing
- c) Provide tax benefits for financial institutions
- d) Manage social security benefits

Answer 9

Prevent money laundering and detect criminal activity financing

Question 10

Which agency enforces the BSA?
- a) Federal Reserve
- b) Department of Treasury’s Financial Crimes Enforcement Network (FinCEN)
- c) Federal Trade Commission
- d) Office of the Comptroller of the Currency

Answer 10

b) Department of Treasury’s Financial Crimes Enforcement Network (FinCEN)

Question 11

What must financial institutions report using a Currency Transaction Report (CTR)?

- a) Any transaction over $5,000
- b) Single or structured currency transactions exceeding $10,000
- c) All foreign transactions
- d) Monthly account balances

Answer 11

Single or structured currency transactions exceeding $10,000

Question 12

What is a key requirement of a Customer Identification Program (CIP)?
- a) Offering financial advice
- b) Verifying customer identities
- c) Providing monthly credit reports
- d) Issuing loans without documentation

Answer 12

b) Verifying customer identities

Question 13

When must a financial institution file a Suspicious Activity Report (SAR)?
- a) Only for transactions over $10,000
- b) When there are known or suspected criminal offenses or transactions of $5,000 or more
- c) Annually for all customers
- d) Never, SARs are optional

Answer 13

When there are known or suspected criminal offenses or transactions of $5,000 or more

Question 14

How long must records used to verify a customer’s identity be maintained under the BSA?
- a) 1 year
- b) 3 years
- c) 5 years
- d) 10 years

Answer 14

5 years

Question 15

Which of the following is prohibited under the BSA?
- a) Opening accounts without verifying identity
- b) Charging fees for services
- c) Offering customer discounts
- d) Providing loan counseling

Answer 15

Opening accounts without verifying identity

Question 16

What should be done if a financial institution detects suspicious activity that requires immediate attention?

- a) Ignore it and wait for the next audit
- b) Immediately notify appropriate law enforcement and file a SAR
- c) Inform the customer
- d) Call the bank manager

Answer 16

Immediately notify appropriate law enforcement and file a SAR

Question 17

9. **What protections are provided to financial institutions for filing SARs?
   
   • a) Immunity from civil liability
   • b) Tax benefits
   • c) Increased federal funding
   • d) Exemption from state laws

Answer 17

Immunity from civil liability

Question 18

What is required to be included in an Anti-Money Laundering (AML) Program?
- a) Marketing strategies
- b) Procedures for compliance with reporting requirements
- c) Customer reward programs
- d) Credit score improvement plans

Answer 18

Procedures for compliance with reporting requirements