In a pricing desk question, the branch manager sees facts tied to BSA Anti Money Laundering. What should the file reflect?
Correct Answer
B) Document the suspicious pattern for compliance review
Why this is correct: The Bank Secrecy Act (BSA) requires financial institutions, including mortgage lenders, to have an Anti-Money Laundering (AML) program. A key component is monitoring for and reporting suspicious activity via a Suspicious Activity Report (SAR). The correct action when a suspicious pattern is identified is to "Document the suspicious pattern for compliance review," which is the first step in the SAR process. Why the other choices are wrong: "Use an internal exception" is wrong because BSA/AML requirements are federal law; internal policies cannot create exceptions to the duty to report suspicious activity. "Wait until a regulator asks" is wrong because the obligation to identify and report suspicious activity is proactive and continuous. "Use the closing disclosure standard" is wrong because TRID closing disclosures are unrelated to the transaction monitoring and reporting required under BSA/AML rules. Exam tip: For BSA/AML, remember the acronym SAR (Suspicious Activity Report). If you see potential money laundering, the steps are: detect, document, report (file a SAR), and maintain confidentiality. Never tip off the customer.
Why This Is the Correct Answer
The correct response is "Document the suspicious pattern for compliance review" 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 C: 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 the closing disclosure standard to decide the BSA Anti Money Laundering issue before confirming the trigger facts.
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 Anti Money Laundering: 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 Anti Money Laundering; 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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