BSAC EXAM PREP QUESTIONS & ANSWERS
True or False:
The credit union's BSA Officer is ultimately responsible for the credit union's BSA
compliance. - Answers :False.
Although the BSA Officer is responsible for coordinating and monitoring day-to-day
BSA/AML compliance and managing all aspects of the BSA compliance program, the
credit union's board of directors is ultimately responsible for the credit union's
compliance. This is why it is critical that the board of directors designate a qualified BSA
officer and receive appropriate BSA/AML training annually.
The BSA Officer must be knowledgeable of:
A. The BSA, and related regulations;
B. The credit union's products and
services;
C. The credit union's members;
D. The credit union's neighborhoods;
E. a & b
F. All of the above. - Answers :The answer is F.
The BSA Officer is expected to be fully knowledgeable of the Bank Secrecy Act and all
related regulations, as well as understand the money laundering and terrorist financing
risks associated with the credit union's products, services, members, and geographic
locations of each credit union office and branch. The BSA Officer should be in a position
to regularly apprise the senior management staff and the board of directors of ongoing
compliance with the BSA/AML requirements.
True or False:
If you are a small credit union (less than $100 million) it is acceptable to have the BSA
Officer identify when BSA- related reports must be filed, fill out the reports, and
determine when members are eligible to be exempt from BSA reporting. - Answers
:False.
As part of the credit union's internal controls, you must have policies and procedures in
place to limit and control risks associated with BSA/AML. Such internal controls include
the segregation of duties whenever possible, so that it isn't the same person
determining who is exempt from filing, when a report should be filed, and actually
completing the reports. It is important to have a "checks and balances" system in place.
Regulators recommend that independent testing of your BSA program should be done:
A. Annually
B. Every 12 to 18 months
C. Whenever necessary
D. Before each exam - Answers :The answer is B.
, The frequency of the required independent testing is not specifically defined in the
regulation, however, the regulators recommend that it be done every 12 to 18 months,
depending on the credit union's risk profile.
Which of the following products and services may have a higher risk for illegal
activities?
A. Wire transfers
B. Monetary instruments
C. Traveler's Checks
D. All of the above - Answers :The answer is D.
Although attempts to launder money or conduct other illegal activities through a credit
union can emanate from many different sources, certain products, services, members,
and geographic locations may be more vulnerable or have historically been known to be
abused by money launderers and criminals. For example, some products and services
may allow a higher degree of anonymity ( such as electronic funds payments), or
involve the handling of high volumes of currency (such as monetary instruments like
cashier's checks, money orders, and traveler's checks).
Which one of these statements is false? Credit unions are required to file a SAR with
respect to:
A. Criminal violations aggregating $5,000 or more involving insider abuse.
B. Criminal violations aggregating $5,000 or more when a suspect can be identified.
C. Criminal violations aggregating $25,000 or more regardless of a potential suspect.
D. Transactions conducted or attempted by, at, or through the credit union (or an
affiliate) and aggregating $5,000 or more, if the credit union or affiliate knows, suspects,
or has reason to suspect that the transaction may involve potential money laundering or
other illegal activity. - Answers :"A" is false.
Credit unions are required to file a SAR with respect to criminal violations involving
insider abuse in any amount.
What about a request that is beyond the scope of a SAR? - Answers :If the credit union
determines that the requested information or documentation is outside the scope of the
SAR, the credit union must request that the federal agency comply with the Right to
Financial Privacy Act - generally, by providing a subpoena, summons, or formal written
request; and obtaining a certificate of compliance from the requesting agency before
turning the documents over.
True or false?
A law enforcement inquiry automatically triggers a SAR filing. - Answers :False.
The mere receipt of any law enforcement inquiry does not, by itself, require the filing of
a SAR. Nonetheless, a law enforcement inquiry may be relevant to a credit union's
overall risk assessment of its members and accounts. The credit union should assess
, all of the information it knows about the member, including the receipt of a law
enforcement inquiry, in accordance with its risk based BSA/AML compliance program.
Additional SAR filings may result from the account review.
Examples of appropriate authorities that may request SAR supporting documentation
include the following. Choose all that apply:
A. Drug Enforcement Administration
B. Internal Revenue Service
C. State Department
D. NCUA or state regulator
E. Credit union's legal counsel - Answers :"A", "B", and "D" are appropriate authorities
under the BSA. In addition to the credit union's regulator, the following agencies are
appropriate authorities under the BSA: Bureau of Alcohol, Tobacco, and Firearms
(ATF); Criminal Investigative Services of the Armed Forces; Drug Enforcement
Administration (DEA); Federal Bureau of Investigation (FBI); Immigration and Customs
Enforcement (ICE); IRS or State Tax Enforcement Agencies; Office of Foreign Assets
Control (OFAC); U.S. Postal Inspection Service; U.S. Secret Service; United States
Attorney's Office; State or Local Police Department; and an Attorney General, District
Attorney, or State's Attorney at the state or local level.
True or False?
The credit union should decline a private law firm's request for the production of a SAR.
- Answers :True.
The credit union should decline a request to produce a SAR or any information that
would disclosure the existence of a SAR, unless disclosure is requested by FINCEN, an
appropriate law enforcement agency, or the credit union's regulator.
True or false?
Credit unions are required to comply with a law enforcement agency's request to keep
certain accounts open during an active investigation. - Answers :False.
Credit unions should
carefully weigh the pros and cons of
complying with law enforcement agencies'
requests to maintain accounts.
Nevertheless, it is ultimately the credit
union's decision whether to maintain or
close the account in accordance with its
risk-based policies and procedures.
What should the credit union obtain before
complying with a law enforcement
True or False:
The credit union's BSA Officer is ultimately responsible for the credit union's BSA
compliance. - Answers :False.
Although the BSA Officer is responsible for coordinating and monitoring day-to-day
BSA/AML compliance and managing all aspects of the BSA compliance program, the
credit union's board of directors is ultimately responsible for the credit union's
compliance. This is why it is critical that the board of directors designate a qualified BSA
officer and receive appropriate BSA/AML training annually.
The BSA Officer must be knowledgeable of:
A. The BSA, and related regulations;
B. The credit union's products and
services;
C. The credit union's members;
D. The credit union's neighborhoods;
E. a & b
F. All of the above. - Answers :The answer is F.
The BSA Officer is expected to be fully knowledgeable of the Bank Secrecy Act and all
related regulations, as well as understand the money laundering and terrorist financing
risks associated with the credit union's products, services, members, and geographic
locations of each credit union office and branch. The BSA Officer should be in a position
to regularly apprise the senior management staff and the board of directors of ongoing
compliance with the BSA/AML requirements.
True or False:
If you are a small credit union (less than $100 million) it is acceptable to have the BSA
Officer identify when BSA- related reports must be filed, fill out the reports, and
determine when members are eligible to be exempt from BSA reporting. - Answers
:False.
As part of the credit union's internal controls, you must have policies and procedures in
place to limit and control risks associated with BSA/AML. Such internal controls include
the segregation of duties whenever possible, so that it isn't the same person
determining who is exempt from filing, when a report should be filed, and actually
completing the reports. It is important to have a "checks and balances" system in place.
Regulators recommend that independent testing of your BSA program should be done:
A. Annually
B. Every 12 to 18 months
C. Whenever necessary
D. Before each exam - Answers :The answer is B.
, The frequency of the required independent testing is not specifically defined in the
regulation, however, the regulators recommend that it be done every 12 to 18 months,
depending on the credit union's risk profile.
Which of the following products and services may have a higher risk for illegal
activities?
A. Wire transfers
B. Monetary instruments
C. Traveler's Checks
D. All of the above - Answers :The answer is D.
Although attempts to launder money or conduct other illegal activities through a credit
union can emanate from many different sources, certain products, services, members,
and geographic locations may be more vulnerable or have historically been known to be
abused by money launderers and criminals. For example, some products and services
may allow a higher degree of anonymity ( such as electronic funds payments), or
involve the handling of high volumes of currency (such as monetary instruments like
cashier's checks, money orders, and traveler's checks).
Which one of these statements is false? Credit unions are required to file a SAR with
respect to:
A. Criminal violations aggregating $5,000 or more involving insider abuse.
B. Criminal violations aggregating $5,000 or more when a suspect can be identified.
C. Criminal violations aggregating $25,000 or more regardless of a potential suspect.
D. Transactions conducted or attempted by, at, or through the credit union (or an
affiliate) and aggregating $5,000 or more, if the credit union or affiliate knows, suspects,
or has reason to suspect that the transaction may involve potential money laundering or
other illegal activity. - Answers :"A" is false.
Credit unions are required to file a SAR with respect to criminal violations involving
insider abuse in any amount.
What about a request that is beyond the scope of a SAR? - Answers :If the credit union
determines that the requested information or documentation is outside the scope of the
SAR, the credit union must request that the federal agency comply with the Right to
Financial Privacy Act - generally, by providing a subpoena, summons, or formal written
request; and obtaining a certificate of compliance from the requesting agency before
turning the documents over.
True or false?
A law enforcement inquiry automatically triggers a SAR filing. - Answers :False.
The mere receipt of any law enforcement inquiry does not, by itself, require the filing of
a SAR. Nonetheless, a law enforcement inquiry may be relevant to a credit union's
overall risk assessment of its members and accounts. The credit union should assess
, all of the information it knows about the member, including the receipt of a law
enforcement inquiry, in accordance with its risk based BSA/AML compliance program.
Additional SAR filings may result from the account review.
Examples of appropriate authorities that may request SAR supporting documentation
include the following. Choose all that apply:
A. Drug Enforcement Administration
B. Internal Revenue Service
C. State Department
D. NCUA or state regulator
E. Credit union's legal counsel - Answers :"A", "B", and "D" are appropriate authorities
under the BSA. In addition to the credit union's regulator, the following agencies are
appropriate authorities under the BSA: Bureau of Alcohol, Tobacco, and Firearms
(ATF); Criminal Investigative Services of the Armed Forces; Drug Enforcement
Administration (DEA); Federal Bureau of Investigation (FBI); Immigration and Customs
Enforcement (ICE); IRS or State Tax Enforcement Agencies; Office of Foreign Assets
Control (OFAC); U.S. Postal Inspection Service; U.S. Secret Service; United States
Attorney's Office; State or Local Police Department; and an Attorney General, District
Attorney, or State's Attorney at the state or local level.
True or False?
The credit union should decline a private law firm's request for the production of a SAR.
- Answers :True.
The credit union should decline a request to produce a SAR or any information that
would disclosure the existence of a SAR, unless disclosure is requested by FINCEN, an
appropriate law enforcement agency, or the credit union's regulator.
True or false?
Credit unions are required to comply with a law enforcement agency's request to keep
certain accounts open during an active investigation. - Answers :False.
Credit unions should
carefully weigh the pros and cons of
complying with law enforcement agencies'
requests to maintain accounts.
Nevertheless, it is ultimately the credit
union's decision whether to maintain or
close the account in accordance with its
risk-based policies and procedures.
What should the credit union obtain before
complying with a law enforcement
