A team member asks about BSA AML Requirements in a daily pipeline review while trying to select the answer that fits the governing requirement. Which response should the loan team use?
Correct Answer
C) Escalate suspicious activity under AML procedures
Why this is correct: The Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) requirements mandate that Residential Mortgage Lenders and Originators (RMLOs) have procedures to detect and report suspicious activity. A core requirement is to escalate any identified suspicious activity for review and potential filing of a Suspicious Activity Report (SAR). The correct response is to "Escalate suspicious activity under AML procedures." Why the other choices are wrong: Using an internal exception in place of a federal rule is a direct violation of BSA/AML requirements. Treating a review as complete because of a closing disclosure note is incorrect; BSA/AML review is a separate, ongoing obligation. Relying on an oral agreement is non-compliant, as AML procedures require formal documentation and reporting. Exam tip: For BSA/AML questions, the correct answer almost always involves taking proactive steps: detecting, documenting, escalating, or reporting suspicious activity. Inaction or substitution is wrong.
Why This Is the Correct Answer
The correct response is "Escalate suspicious activity under AML procedures" 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: Treat the BSA AML Requirements review as complete because the file contains a related closing disclosure note.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
Option D: Rely on oral agreement when the rule requires documented compliance.
Rely on oral agreement when the rule requires documented compliance. is not correct because it does not apply the rule tested by this file scenario.
Memory Technique
BSA / AML 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 / AML 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
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