A supervisory file review raises a question about BSA/AML Requirements. Which action should the sponsorship reviewer recommend?
Correct Answer
D) Document the suspicious pattern for compliance review
Why this is correct: The Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) rules require Residential Mortgage Lenders and Originators (RMLOs) to monitor for and report suspicious activity. A core requirement is to document and escalate suspicious patterns for formal compliance review, which may lead to filing a Suspicious Activity Report (SAR). The correct action is to "Document the suspicious pattern for compliance review." Why the other choices are wrong: "Use an internal exception instead of the required federal disclosure or timing rule" is wrong because internal policies cannot override federal BSA/AML requirements. "Treat the BSA AML Requirements review as complete because the file contains a related loan estimate note" is wrong because a Loan Estimate note is unrelated to BSA/AML compliance; the review must specifically address suspicious activity. "Rely on oral agreement when the rule requires documented compliance" is wrong because BSA/AML compliance requires written documentation and procedures; oral agreements are insufficient. Exam tip: For BSA/AML, think 'detect, document, escalate.' Never hide or ignore a suspicious pattern.
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: 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 B: Treat the BSA AML Requirements review as complete because the file contains a related loan estimate note.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
Option C: 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 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/AML 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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