In a closing-readiness check, a processor sees facts tied to BSA AML Requirements. What should the file reflect?
Correct Answer
C) Keep SAR activity confidential from the borrower
Why this is correct: The Bank Secrecy Act (BSA) requires financial institutions to assist in detecting and preventing money laundering. A key component is filing Suspicious Activity Reports (SARs) confidentially with FinCEN. The SAR and the fact that a report was filed must not be disclosed to the borrower or other involved parties, as this could "tip off" the subject and compromise investigations. Why the other choices are wrong: "Assume the BSA AML Requirements condition is met because the borrower satisfied the separate SAFE Act testing requirement" is wrong because the SAFE Act (licensing) and BSA (anti-money laundering) are distinct regulatory regimes; compliance with one does not satisfy the other. "Wait until a regulator asks for the file before applying the federal requirement" is wrong because SARs must be filed within a required timeframe (e.g., 30 days), not delayed. "Rely on oral agreement when the rule requires documented compliance" is wrong because BSA compliance, including SAR filing and recordkeeping, requires written documentation. Exam tip: Remember that SAR confidentiality is absolute. Never disclose a SAR filing to the subject of the report.
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: Assume the BSA AML Requirements condition is met because the borrower satisfied the separate SAFE Act testing requirement.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
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: 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
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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A mortgage file is paused during a secondary-market screen because of BSA Anti Money Laundering. Which answer should choose the most defensible file action?
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