A disclosure specialist is resolving BSA SAR Filing Requirements during a loan-team coaching session. Which action best fits the rule?
Correct Answer
C) Keep SAR activity confidential from the borrower
Why this is correct: A key pillar of Suspicious Activity Report (SAR) filing under BSA/AML rules is confidentiality. The financial institution is prohibited from disclosing to the involved customer that a SAR has been filed or is being prepared. This protects the integrity of the investigation. The correct action is to "Keep SAR activity confidential from the borrower." Why the other choices are wrong: "Use an internal exception instead of the required federal disclosure or timing rule" is wrong because SAR filing is a strict federal requirement with no allowable internal exceptions for its core obligations. "Wait until a regulator asks for the file before applying the federal requirement" is wrong because SARs have strict filing deadlines (generally 30 days after detection); waiting for a regulator is non-compliant. "Use prior state renewal approval as a substitute for the current BSA SAR Filing Requirements requirement" is wrong because state licensing renewal is unrelated to the federal obligation to file a SAR for suspicious activity. Exam tip: SAR confidentiality is absolute. 'Tipping off' the subject of a SAR is a serious violation.
Why This Is the Correct Answer
The correct response is "Keep SAR activity confidential from the borrower" because RMLO AML and SAR rules require suspicious activity escalation and confidentiality.
Why the Other Options Are Wrong
Option A: Use an internal exception instead of the required federal disclosure or timing rule.
Use an internal exception instead of the required federal disclosure or timing rule. is not correct because it does not apply the rule tested by this file scenario.
Option B: Wait until a regulator asks for the file before applying the federal requirement.
Wait until a regulator asks for the file before applying the federal requirement. is not correct because it does not apply the rule tested by this file scenario.
Option D: Use prior state renewal approval as a substitute for the current BSA SAR Filing Requirements requirement.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
Memory Technique
BSA SAR Filing Requirements: 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 BSA SAR Filing Requirements; 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 Federal Laws Questions
A mortgage file is paused during a lock-desk handoff because of FCRA Adverse Action Notices. Which answer should identify which rule controls the file?
Before the team acts on a production meeting, a training manager must address SCRA Interest Rate Cap. Which response is most defensible?
Before the team acts on a production meeting, the MLO must address FCRA Adverse Action Notice. Which response is most defensible?
A team member asks about RESPA Kickbacks and Referrals in an investor-delivery review while trying to confirm the rule-based response. Which response should the loan team use?
During a disclosure desk review, the loan team encounters an RESPA Servicing Transfer issue. Which response should avoid a shortcut that would misapply the rule?
A mortgage team asks a quality-control reviewer about TRID Loan Estimate timing during a record-retention audit. Which answer should guide the file?
A mortgage team asks a branch supervisor about TILA APR and finance-charge rules during a renewal checklist. Which answer should guide the file?
A mortgage file is paused during a risk-control review because of TILA QM DTI Calculation. Which answer should choose the most defensible file action?
A disciplinary-risk review raises a question about TILA APR and finance-charge rules. Which action should the renewal specialist recommend?
An MLO is reviewing procedures for a case where a compliance analyst asks why covered mortgage application data is collected. What is the proper handling?
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