A residential mortgage lender files a suspicious activity report about a borrower on 8 April. On 15 April the borrower calls to ask why the file has stalled, and the branch manager wants to tell him a report was filed so he can explain himself. May the manager tell the borrower that a suspicious activity report was filed?
Correct Answer
D) No: a SAR and any information revealing its existence are confidential
D. Do not tell the subject that a SAR was filed. The confidentiality rule covers both the report and information revealing its existence. A manager’s proposed disclosure to the subject is not one of the authorized disclosures to regulators or law enforcement. Waiting until April 15 does not change that. Scope and exceptions: The rule has specific authorized disclosures. Confidentiality of a SAR does not automatically make every underlying transaction document secret, but sharing it must not reveal a SAR’s existence improperly. Source: 31 CFR 1029.320(d)(1)(i)–(ii) — https://www.ecfr.gov/current/title-31/subtitle-B/chapter-X/part-1029/subpart-C/section-1029.320
Why This Is the Correct Answer
D. Do not tell the subject that a SAR was filed. The confidentiality rule covers both the report and information revealing its existence. A manager’s proposed disclosure to the subject is not one of the authorized disclosures to regulators or law enforcement. Waiting until April 15 does not change that. Scope and exceptions: The rule has specific authorized disclosures. Confidentiality of a SAR does not automatically make every underlying transaction document secret, but sharing it must not reveal a SAR’s existence improperly.
Why the Other Options Are Wrong
Option A: No, unless the borrower signs a written authorization to release it
The subject’s consent does not authorize this disclosure.
Option B: Yes, if the borrower asks directly and the disclosure is noted in the file
A customer question does not waive SAR confidentiality.
Option C: Yes, once 30 days have passed and the filing is complete and submitted
The filing timeline is not a 30-day confidentiality expiration.
Exam Tip
Do not confuse a reporting deadline with permission to notify the subject.
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