A borrower-facing employee is unsure what to do when a borrower asks whether the company will file a suspicious activity report. What is the correct response?
Correct Answer
A) Do not tell the borrower that a SAR may be filed
Why this is correct: The SAR confidentiality rule in 31 CFR 1029.320 mandates that a borrower must not be informed about a potential or actual SAR filing. This prevents "tipping off," which could allow the subject to evade investigation. Why the other choices are wrong: "Use an informal exception and leave the required record unchanged" is wrong because SAR procedures are formal; no informal exceptions exist for confidentiality. "Let production goals override the required verification, disclosure, license, or record step" is wrong because production pressure never justifies violating SAR rules. "Apply the rule only after a regulator asks specifically about records, reports, and required notices" is wrong because the confidentiality requirement is proactive and applies regardless of regulatory inquiry. Exam tip: Remember, "tipping off" is a serious violation. Always train staff to respond neutrally without confirming or denying a SAR.
Why This Is the Correct Answer
The correct response is "Do not tell the borrower that a SAR may be filed". SAR rules include confidentiality; the borrower should not be tipped off about a SAR filing or potential filing.
Why the Other Options Are Wrong
Option B: Use an informal exception and leave the required record unchanged.
Use an informal exception and leave the required record unchanged. is not correct because it bypasses the rule supported by the explanation.
Option C: Let production goals override the required verification, disclosure, license, or record step.
Let production goals override the required verification, disclosure, license, or record step. is not correct because it bypasses the rule supported by the explanation.
Option D: Apply the rule only after a regulator asks specifically about records, reports, and required notices.
Apply the rule only after a regulator asks specifically about records, reports, and required notices. is not correct because it bypasses the rule supported by the explanation.
Memory Technique
For SAR questions, no tipping is almost always the tested ethics point.
Exam Tip
For SAR questions, no tipping is almost always the tested ethics point.
Common Mistakes to Avoid
- -Customer service transparency does not include disclosing SAR activity to the subject.
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