Before the team acts on a servicing handoff check, a training manager must address BSA AML CIP. Which response is most defensible?
Correct Answer
A) Keep SAR activity confidential from the borrower
Why this is correct: The Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) rules, including the Customer Identification Program (CIP), require financial institutions to monitor for and report suspicious activity. A Suspicious Activity Report (SAR) is filed confidentially with FinCEN. A cornerstone of the SAR rule is strict confidentiality; the filing and its contents must not be disclosed to the person involved in the transaction (e.g., the borrower), as this could "tip off" the subject and compromise an investigation. The most defensible action is to "Keep SAR activity confidential from the borrower." Why the other choices are wrong: "Use an internal exception instead of the required federal disclosure or timing rule" is wrong because BSA/AML requirements are federal mandates with no room for internal exceptions. "Wait until a regulator asks for the file before applying the federal requirement" is wrong because SARs must be filed proactively within a strict deadline (generally 30 days) after suspicious activity is detected. "Rely on oral agreement when the rule requires documented compliance" is wrong because BSA/AML compliance, including CIP, requires documented procedures and records. Exam tip: The SAR confidentiality rule is absolute. Never disclose that a SAR was filed or its contents 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 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: 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 / CIP: 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 / CIP; 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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