The loan team is resolving Bank Secrecy Act during a loan setup review. Which action best fits the rule?
Correct Answer
B) Document the suspicious pattern for compliance review
Why this is correct: The Bank Secrecy Act (BSA) and its Anti-Money Laundering (AML) rules require financial institutions, including mortgage lenders, to monitor for and report suspicious activity. A key requirement is for the institution to document any detected red flags or unusual patterns and file a Suspicious Activity Report (SAR) with FinCEN if warranted. Therefore, the correct action is to document the suspicious pattern for compliance review. Why the other choices are wrong: "Apply the correct general concept to the wrong loan estimate stage rather than the Bank Secrecy Act rule" is wrong because it misapplies a disclosure timing concept (from TILA) to a completely different BSA/AML compliance obligation. "Wait until a regulator asks for the file before applying the federal requirement" is wrong because BSA requires proactive monitoring and reporting; waiting for a regulator is non-compliance. "Rely on oral agreement when the rule requires documented compliance" is wrong because BSA/AML compliance, including decisions on SAR filings, must be documented. Exam tip: For BSA/AML, remember the acronym SAR (Suspicious Activity Report). The first step is always to identify and document the suspicious activity internally.
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 correct general concept to the wrong loan estimate stage rather than the Bank Secrecy Act rule.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
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
Bank Secrecy Act: 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 Bank Secrecy Act; 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
More Federal Laws Questions
Before the team acts on a production meeting, a training manager must address SCRA Interest Rate Cap. Which response is most defensible?
A team member asks about RESPA Kickbacks and Referrals in an investor-delivery review while trying to confirm the rule-based response. Which response should the loan team use?
During a disclosure desk review, the loan team encounters an RESPA Servicing Transfer issue. Which response should avoid a shortcut that would misapply the rule?
A disciplinary-risk review raises a question about TILA APR and finance-charge rules. Which action should the renewal specialist recommend?
An MLO is reviewing procedures for a case where a compliance analyst asks why covered mortgage application data is collected. What is the proper handling?
A consumer complaint response raises a question about GLBA privacy requirements. Which action should the state compliance officer recommend?
Before the team acts on a branch training session, a policy analyst must address RESPA Servicing Transfer Notice. Which response is most defensible?
A training manager is resolving RESPA Referral Fees during an internal audit sample. Which action best fits the rule?
An operations lead is resolving ECOA Prohibited Discrimination Bases during a loan-team coaching session. Which action best fits the rule?
In a file escalation meeting, a disclosure specialist sees facts tied to TILA Closing Disclosure. What should the file reflect?
People Also Study
General Mortgage Knowledge
20% of exam
Mortgage Loan Origination Activities
27% of exam
Ethics, Fraud & Consumer Protection
18% of exam
Uniform State Test Content
11% of exam
Related Study Resources
Previous Question
A lender relies on Regulation P's annual privacy-notice exception. It then changes policies about disclosing nonpublic personal information that it described in its most recent privacy notice. Can it continue relying on that exception solely because its sharing remains within an applicable exception?
Next Question
A borrower writes asking for a breakdown of the escrow disbursements over the last two years. The request is routed to a shared inbox and sits unread for a week. What has the servicer already failed to do?