A manager tells a borrower his file is delayed "because of a suspicious activity report we had to file". A compliance analyst overhears the call. What has gone wrong, quite apart from the delay?
Correct Answer
C) Document the suspicious pattern for AML review
Why this is correct: The Bank Secrecy Act requires financial institutions to file a Suspicious Activity Report (SAR) when they detect a transaction or pattern that suggests money laundering, fraud, or other illegal activity. The key rule is to report the suspicion internally and to the government, while also avoiding "tipping off" the subject. The correct action, "Document the suspicious pattern for AML review," is the essential first step in the SAR process, ensuring the activity is properly identified and escalated for potential filing. Why the other choices are wrong: "Continue the activity because the borrower appears willing to proceed" is wrong because willingness is irrelevant to the legal duty to report suspicious activity. "Delay the SAR Filing Requirements step until a later licensing review instead of acting now" is wrong because SARs have strict timelines (generally 30 days after detection); delaying is non-compliant. "Document the issue later instead of correcting the compliance problem first" is wrong because the "compliance problem" here is the failure to initiate the SAR review process, which must be done immediately. Exam tip: SAR rules trigger upon suspicion. The immediate action is to document and escalate internally for review, not to delay or ignore.
Why This Is the Correct Answer
The correct response is "Document the suspicious pattern for AML review" because SAR rules require reporting or escalation of suspicious activity and prohibit tipping off subjects.
Why the Other Options Are Wrong
Option A: Continue the activity because the borrower appears willing to proceed.
Continue the activity because the borrower appears willing to proceed. is not correct because it does not apply the rule tested by this file scenario.
Option B: Delay the SAR Filing Requirements step until a later licensing review instead of acting now.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
Option D: Document the issue later instead of correcting the compliance problem first.
Document the issue later instead of correcting the compliance problem first. is not correct because it does not apply the rule tested by this file scenario.
Memory Technique
SAR escalation and anti-tipping rules: 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 SAR escalation and anti-tipping rules; 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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