A mortgage team asks a state compliance officer about BSA Customer Identification Program during a training scenario. Which answer should guide the file?
Correct Answer
A) File or escalate when SAR criteria are met
Why this is correct: A core requirement of the Bank Secrecy Act (BSA) anti-money laundering (AML) program is the filing of a Suspicious Activity Report (SAR) when specific criteria are met. The correct action, "File or escalate when SAR criteria are met," is the definitive compliance step for handling identified suspicious activity, which is a central BSA/AML obligation. Why the other choices are wrong: "Use an internal exception instead of the required federal disclosure or timing rule" is wrong because federal SAR filing requirements are mandatory and cannot be overridden by internal policy. "Apply the correct general concept to the wrong consumer complaint stage rather than the BSA Customer Identification Program rule" is wrong because it describes a procedural error, not a compliant action. "Rely on oral agreement when the rule requires documented compliance" is wrong because SAR decisions and filings require formal, documented procedures. Exam tip: In BSA/AML scenarios, when suspicious activity is identified, the required action is always to file or escalate a SAR. This is a critical and non-discretionary reporting duty.
Why This Is the Correct Answer
The correct response is "File or escalate when SAR criteria are met" because RMLO AML and SAR rules require suspicious activity escalation and confidentiality.
Why the Other Options Are Wrong
Option B: 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: Apply the correct general concept to the wrong consumer complaint stage rather than the BSA Customer Identification Program rule.
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 Customer Identification Program: 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 Customer Identification Program; 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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