A processor asks how to handle a file where a borrower asks whether the company will file a suspicious activity report. Which response is most accurate?
Correct Answer
A) Do not tell the borrower that a SAR may be filed
Why this is correct: The accurate response is dictated by 31 CFR 1029.320, which governs SAR filings. A key provision is the prohibition against disclosing that a SAR has been prepared or filed. This confidentiality requirement is designed to prevent subjects from being tipped off. Therefore, when a borrower asks about a potential SAR, the processor must not provide any information. The most accurate response is to "Do not tell the borrower that a SAR may be filed." Why the other choices are wrong: The choice to "Treat the Suspicious activity and borrower information review as complete because the file contains a related credit underwriting note" is wrong because a credit underwriting note is unrelated to SAR confidentiality; the review is not complete until the confidentiality rule is followed. The choice to "Ignore the consumer-protection issue unless the borrower complains" is wrong because SAR rules are not consumer-protection issues triggered by complaints; they are mandatory reporting and confidentiality duties for the institution. The choice to "Document the issue later instead of correcting the compliance problem first" is wrong because the primary compliance step is to avoid disclosure, not just to document. Exam tip: SAR confidentiality trumps all other file notes or processes. The presence of other documentation does not satisfy this specific rule.
Why This Is the Correct Answer
The correct response is "Do not tell the borrower that a SAR may be filed" because Lines 255-260; 31 CFR 1029.320 and final rule discussion of reports of suspicious transactions.
Why the Other Options Are Wrong
Option B: Treat the Suspicious activity and borrower information review as complete because the file contains a related credit underwriting 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: Ignore the consumer-protection issue unless the borrower complains.
Ignore the consumer-protection issue unless the borrower complains. is not correct because it does not apply the rule tested by this file scenario.
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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