USA Patriot ACT

Question 1

USA PATRIOT Act Purpose:

Answer 1

• Enacted in response to the terrorist attacks of September 11, 2001.
• Title III, the “International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001,” impacts mortgage lending by addressing money laundering and terrorist financing.
• Money Laundering: Filtering ill-gotten money through transactions to obscure its illegal source.
• Regulatory Agency: The Department of Treasury, with FinCEN (Financial Crimes Enforcement Network) responsible for investigating, identifying, and reporting financial crimes.

Question 2

Actions Required by Title III of the PATRIOT Act

Establish a Customer Identification Program (CIP) which contains :

Answer 2

• Collect information: Name, date of birth, address, identification number (SSN for U.S. citizens, taxpayer ID, passport number, or alien ID card for non-U.S. citizens).
• Verify information using documentation (driver’s license, passport, etc.).
• Maintain records for five years after the account is closed.
• Compare consumer identity against lists of known or suspected terrorists.
• Notify customers that identity verification is necessary.

Question 3

Create an Anti-Money Laundering (AML) Program: contains

Answer 3

• Written program approved by senior management
• Procedures for compliance with reporting requirements
• Appointment of a compliance officer
• Ongoing employee training
• Independent testing for program adequacy

Question 4

Make Suspicious Activity Reports (SARs): contains

Answer 4

• File SARs for transactions involving illegal activity, evading the Bank Secrecy Act, unusual transactions for the customer, or criminal activity
• SARs are filed with FinCEN
• RMLOs are protected from civil liability for filing SARs.

Question 5

Report Receipt of Currency in Excess of $5,000: contains

Answer 5

Report Receipt of Currency in Excess of $5,000:

• Report large currency transactions.
• File SAR within 30 days of detecting suspicious activity.
• Notify law enforcement immediately for urgent matters.
• Retain SARs and supporting documentation for five years.

Question 6

What is the primary purpose of the USA PATRIOT Act’s Title III?

- a) Regulate agricultural transactions
- b) Address money laundering and terrorist financing
- c) Manage social security benefits
- d) Provide healthcare reforms

Answer 6

Address money laundering and terrorist financing

Question 7

Which regulatory agency is responsible for implementing Title III of the PATRIOT Act?

- a) Federal Reserve
- b) Department of Treasury
- c) Federal Trade Commission
- d) Office of the Comptroller of the Currency

Answer 7

Department of Treasury

Question 8

What is required as part of a Customer Identification Program (CIP)?

- a) Collecting information like name, date of birth, address, and identification number
- b) Providing customer loyalty programs
- c) Offering financial advice
- d) Issuing credit reports monthly

Answer 8

Collecting information like name, date of birth, address, and identification number

Question 9

What is an Anti-Money Laundering (AML) Program required to include?

- a) Marketing strategies
- b) Appointment of a compliance officer
- c) Customer reward programs
- d) Credit score improvement plans

Answer 9

Appointment of a compliance officer

Question 10

When must a Suspicious Activity Report (SAR) be filed?

- a) Only for transactions over $10,000
- b) When there is evidence of illegal activity or unusual transactions
- c) Annually for all customers
- d) Never, SARs are not required

Answer 10

When there is evidence of illegal activity or unusual transactions

Question 11

How long must records used to verify a customer’s identity be maintained?

- a) 1 year
- b) 3 years
- c) 5 years
- d) 10 years

Answer 11

5 years

Question 12

What should be done if an RMLO detects a 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 12

Immediately notify appropriate law enforcement and file a SAR

Question 13

Which of the following is prohibited under the PATRIOT Act?

- a) Opening new accounts without verifying identity
- b) Charging fees for services
- c) Offering customer discounts
- d) Providing loan counseling

Answer 13

Opening new accounts without verifying identity

Question 14

What protections are provided to RMLOs for filing SARs?

- a) Immunity from civil liability
- b) Tax benefits
- c) Increased federal funding
- d) Exemption from state laws

Answer 14

Immunity from civil liability

Question 15

How are residential mortgage lenders and originators collectively referred to under the PATRIOT Act regulations?

- a) Loan officers
- b) Financial advisors
- c) RMLOs (Residential Mortgage Lenders and Originators)
- d) Banking representatives

Answer 15

RMLOs (Residential Mortgage Lenders and Originators)