BSA/AML Flashcards
Which of the following businesses would be eligible to be an exempt person
under the requirements of the Bank Secrecy Act?
a. Jackson’s Used Cars
b. Evanston Recreational Boats
c. Al Williams Seafood Restaurant
d. Goldsmith Aircraft Distributors
c. Al Williams Seafood Restaurant
Fastfood, Inc., a nationwide restaurant chain, opened an account at First National Bank last year. Fastfood is making daily cash deposits in amounts of $15,000 to $20,000. First National needs to determine if this company is an exempt person. What should the bank do first?
a. Because the restaurant is an established depositor, the bank should provide an unlimited exemption for cash deposits and withdrawals.
b. The bank should look in the newspaper or on the Internet to determine if Fastfood, Inc.’s, stock appears on one of the listed exchanges.
c. The bank should ask the company if it qualifies as a listed business.
d. The bank should perform a corporate records check to determine if the company is chartered in the United States.
b. The bank should look in the newspaper or on the Internet to determine if Fastfood, Inc.’s, stock appears on one of the listed exchanges.
First National Bank is attempting to determine which of the following customers would qualify as exempt persons:
Nationwide Foods, Inc., is a national company with stock listed on the New York Stock Exchange
National Paper Products, is a wholly owned subsidiary of Nationwide Foods, Inc.
Products Incorporated, a depositor for three months, is a regional company whose stock is designated a NASDAQ Capital Markets Company and that sells and leases large boats
Century Enterprises, a local company owning several local restaurants, is a long-time bank customer and frequently makes cash deposits in excess of $10,000. All of Century’s stock is owned by a local family.
Which of these customers would qualify as an exempt person?
a. All except for Nationwide Foods, Inc.
b. All except for National Paper Products
c. All except for Century Enterprises
d. All except for Products Incorporated
d. All except for Products Incorporated
James Walker DBA Walker Enterprises has been a customer of the bank for one month. The company told the bank that it would regularly make deposits in excess of $10,000 because it operates several laundromats in the city. The bank performed a background check on the company before opening the account. For its first 30 days, the company made 12 large cash deposits. Can the bank exempt this company now? Why or why not?
a. No. It is a not a corporation, but a sole proprietorship.
b. No. It has not maintained an account at the bank for 12 months.
c. No. It operates an ineligible business.
d. Yes. The bank conducted due diligence on the customer to determine that it had legitimate large cash transactions.
d. Yes. The bank conducted due diligence on the customer to determine that it had legitimate large cash transactions.
First National Bank has several exempt customers.
Alpha is an exempt person because its stock is listed on a major stock exchange.
Beta is an exempt person because it meets the non-listed customer requirements.
Zeta is exempt because it is a payroll customer.
For which customer(s) must the bank conduct an annual review to determine its continuing eligibility to be exempt from CTR filings?
a. Alpha
b. Beta
c. Zeta
d. Alpha, Beta, and Zeta
d. Alpha, Beta, and Zeta
Mrs. Evans, a customer of First National Bank, deposits $15,000 in cash to her account. During the transaction, Mrs. Evans explains that she received the money in the mail from her sister in Europe. What responsibility does the bank have?
a. Complete a Currency Transaction Report (CTR)
b. Complete a United States Customs form 4790 (CMIR
c. Complete both a currency transaction report and a CMIR
d. Complete a CTR and encourage Mrs. Evans to file a CMIR
d. Complete a CTR and encourage Mrs. Evans to file a CMIR
For how long must a bank keep records of transactions involving currency in amounts greater than $10,000?
a. 2 years
b. 3 years
C. 5 years
d. 7 years
C. 5 years
The manager of Main Street branch calls and relates the following information: John Smith purchased a cashier’s check for $1,000 cash at 10:00 A.M. on Tuesday. At 11:30 A.M. Mr. Smith returned and purchased a cashier’s check for $2,500 cash and deposited traveler’s checks totaling $9,000 into his checking account. At 4:00 P.M. Mr. Smith returned and deposited $8,000 cash into his checking account. This deposit was after normal banking hours, so it was recorded as of Wednesday’s business date. What action should the bank take?
a. None, because no single cash transaction exceeded $10,000
b. File a Currency Transaction Report (CTR) for $11,500
c. Record the $1,000, $2,500, and $9,000 transactions on the bank’s monetary instrument sales log because the total exceeds the $3,000 threshold
d. Record the $1,000 and $2,500 transactions on the bank’s monetary instrument sales log because the total exceeds the $3,000 threshold
d. Record the $1,000 and $2,500 transactions on the bank’s monetary instrument sales log because the total exceeds the $3,000 threshold
Records that must be retained for deposit accounts include which of the following?
a. Average daily balance
b. Overdraft history
c. All amounts of currency deposited or withdrawn
d. Customer’s identity
d. Customer’s identity
Mammoth Enterprises is a new customer to the bank. It is a wholly owned subsidiary of Mammoth Corporation. Which of the following statements, if true, would make Mammoth Enterprises an exempt customer at the bank?
a. ‘ Mammoth Corporation is a London corporation, trading on the London Stock Exchange
b. Mammoth Corporation is a U.S. corporation with unlisted stock.
c. Mammoth Corporation is a U.S. corporation trading on the American Stock Exchange.
d. Mammoth Enterprises is a U.S. corporation primarily in the investment banking business.
c. Mammoth Corporation is a U.S. corporation trading on the American Stock Exchange.
In April Lillian Redmond, the teller supervisor for First National Bank,
discovers five counterfeit $20 bills in several teller drawers. In May and in June she discovers two additional counterfeit $20 bills. She has no knowledge of criminal activity on the part of any of the bank’s employees or customers. She does not suspect any particular person in this transaction. Which of the following statements is true?
a. Ms. Redmond must report the counterfeit funds on a SAR and must name the most likely individual(s) on the report.
b. Ms. Redmond must report the counterfeit funds on a SAR but is not required to name any individual(s) on the report.
c. Ms. Redmond need not file a SAR on this incident because the total amount is less than $25,000.
d. Ms. Redmond need not report this incident on a SAR because each incident is less than $5,000.
c. Ms. Redmond need not file a SAR on this incident because the total amount is less than $25,000.
Martha Whitmire, the BSA Compliance Officer for First National Bank, is Regulatory responsible for monitoring the bank’s daily currency activity and wire transfers, Compliance for compliance with information retention and reporting requirements.
Ms. Whitmire notices during her review on March 10 that, during the previous two weeks, a transaction occurred on the same account several times during the week. The activity appeared at one branch office as cash deposits in dollar
amounts under the reporting thresholds. Ms. Whitmire discusses this activity with the branch manager and determines that this same deposit activity occurred several times during the previous six weeks. She then conducts a more extensive
examination of the account’s activity for several months and discovers that deposits were made at one branch office and purchases of bank cashier’s checks requirements were made by withdrawals from the same account at a different branch office. All withdrawals and purchases of cashier’s checks were for the identical amount requirements
as the cash deposits. Which statement best describes Ms. Whitmire’s responsibility?
a. Complete a CTR for each of the cash activities at the branch office financial accounts
b. Make no report of the activities because the transactions were not Purchases of monetary discovered until after the 15-day reporting deadline instruments Funds transfers
c. Report the account activity to senior management for further review Due diligence for foreign
d. Report the account activity as suspicious account activity and recommend correspondent banks that a SAR be filed and private banking accounts and prohibitions on accounts
d. Report the account activity as suspicious account activity and recommend correspondent banks that a SAR be filed and private banking accounts and prohibitions on accounts
Bob Jones, president of ACME bank, has had a banking relationship with Linda for foreign shell banks
O’Reilly, a local real estate agent for several years. Ms. O’Reilly keeps most of Information-sharing procedures to deter
her deposit accounts with ACME and also has had several personal loans there.
Over a three-month time period, Ms. O’Reilly consistently (two or three times a week) brings to the bank a series of money orders in amounts ranging from $7,000 to $15,000, made payable to her in denominations of $1,000, and asks the teller to take them and issue one cashier’s check payable to her. After this activity has continued for three months, Mr. Jones notices
cashier’s checks issued to Ms. O’Reilly on a management report. It catches his attention because he does not know why Ms. O’Reilly would need this number of cashier’s checks. On inquiry, the head teller explains the weekly transactions.
Which of the following statements best describes Mr. Jones’s responsibility?
a. He should immediately file a SAR. There is no logical explanation for this activity.
b. He should immediately file a CTR. Ms. O’Reilly is trying to evade the BSA currency transaction.
c. He should ask Ms. O’Reilly why she is conducting these transactions and then determine whether to file a SAR.
d. He is not required to do anything. Mr. Jones is well acquainted with this customer, and it is not illegal to purchase cashier’s checks.
c. He should ask Ms. O’Reilly why she is conducting these transactions and then determine whether to file a SAR.
Which of the following is an accurate statement according to he requirements of the customer identification program regulations?
a. A bank must always require documentary verification of a customer’s identification
b. A bank may waive any part of the CIP requirements if senior management approves the waiver and there is a good cause
c. A physical address or a post office box is acceptable for any new customer
d. The bank’s CIP program must enable it to form a reasonable belief about the identity of the person
d. The bank’s CIP program must enable it to form a reasonable belief about the identity of the person
When conducting a records search pursuant to a FinCEN request, what must a bank search?
a. All customer records from the previous five years
b. All accounts maintained within the previous 12 months and transaction records for 6 months
c. Only records that can be electronically searched
d. Nothing; searches are voluntary
b. All accounts maintained within the previous 12 months and transaction records for 6 months
