The loan team is resolving BSA Suspicious Activity Reporting during a quality-control sample. Which action best fits the rule?
Correct Answer
A) Do not tell the borrower whether a SAR will be filed
Why this is correct: The Bank Secrecy Act (BSA) requires financial institutions to file a Suspicious Activity Report (SAR) for certain transactions. A critical rule is the prohibition on "tipping off"—the institution and its employees must not disclose to anyone involved in the suspicious activity that a SAR has been or will be filed. The correct action, "Do not tell the borrower whether a SAR will be filed," strictly adheres to this anti-tipping-off requirement. Why the other choices are wrong: "Continue the activity because the borrower appears willing to proceed" is wrong because suspicious activity must be reported and may require halting the transaction, regardless of borrower willingness. "Ignore the consumer-protection issue unless the borrower complains" is wrong because SAR filing is a legal duty triggered by the institution's suspicion, not consumer complaints. "Document the issue later instead of correcting the compliance problem first" is wrong because the compliance problem (potential illegal activity) requires immediate reporting and action, not delayed documentation. Exam tip: For SAR questions, "don't tip off the subject" is a cardinal rule. Any action that could alert the suspect is prohibited.
Why This Is the Correct Answer
The correct response is "Do not tell the borrower whether a SAR will be filed" because SAR rules require reporting or escalation of suspicious activity and prohibit tipping off subjects.
Why the Other Options Are Wrong
Option B: Continue the activity because the borrower appears willing to proceed.
Continue the activity because the borrower appears willing to proceed. is not correct because it does not apply the rule tested by this file scenario.
Option C: Ignore the consumer-protection issue unless the borrower complains.
Ignore the consumer-protection issue unless the borrower complains. is not correct because it does not apply the rule tested by this file scenario.
Option D: Document the issue later instead of correcting the compliance problem first.
Document the issue later instead of correcting the compliance problem first. is not correct because it does not apply the rule tested by this file scenario.
Memory Technique
SAR escalation and anti-tipping rules: identify the rule being tested, then choose the action that documents or applies that rule before the file moves forward.
Exam Tip
Match the file facts to SAR escalation and anti-tipping rules; do not choose an exception or shortcut that skips the required rule.
Common Mistakes to Avoid
- -Choosing an internal exception instead of the governing rule
- -Treating preliminary or informal facts as a substitute for required documentation
- -Answering from a familiar but unrelated mortgage topic
More Ethics & Fraud Questions
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The loan team is resolving Privacy and Confidentiality during a quality-control sample. Which action best fits the rule?
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