Before the team acts on a supervisory file review, an audit analyst must address BSA CTR Requirements. Which response is most defensible?
Correct Answer
C) Document the suspicious pattern for compliance review
Why this is correct: The Bank Secrecy Act (BSA) requires reporting of certain currency transactions, including filing Currency Transaction Reports (CTRs). It also mandates monitoring for and reporting suspicious activity. When a suspicious pattern is identified during a file review, the compliant first step is to document it for formal compliance review. This action supports both CTR review and potential SAR filing obligations. The correct action is "Document the suspicious pattern for compliance review." Why the other choices are wrong: "Apply the licensing timing rule even though the file is testing BSA CTR Requirements" is wrong because it applies an irrelevant rule to a BSA compliance issue. "Wait until a regulator asks for the file before applying the federal requirement" is wrong because BSA rules require proactive monitoring and reporting. "Rely on oral agreement when the rule requires documented compliance" is wrong because BSA/AML procedures mandate written records. Exam tip: For BSA, including CTR and SAR rules, the immediate action upon finding a red flag is to document and escalate for review.
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: Apply the licensing timing rule even though the file is testing BSA CTR Requirements.
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 CTR 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 CTR 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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