Bank Secrecy Act Compliance
Examination Questions And Correct
Answers (Verified Answers) Plus
Rationales 2026 Q&A | Instant
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Question 1
Which of the following is the primary purpose of the Bank Secrecy Act (BSA)?
A) To protect consumer privacy in banking transactions
B) To prevent money laundering and terrorist financing through financial
institutions
C) To ensure banks maintain adequate capital reserves
D) To regulate interest rates on deposit accounts
Answer: B) To prevent money laundering and terrorist financing through
financial institutions. The BSA was enacted to require financial institutions to
assist U.S. government agencies in detecting and preventing money laundering,
terrorist financing, and other financial crimes. While privacy and capital reserves
are regulated elsewhere, the BSA's core focus is on anti-money laundering (AML)
and counter-terrorist financing (CTF) through recordkeeping and reporting
requirements.
Question 2
Under the BSA, which federal agency is primarily responsible for administering
and enforcing the statute for most depository institutions?
A) Federal Reserve Board
B) Office of the Comptroller of the Currency
,C) Financial Crimes Enforcement Network (FinCEN)
D) Securities and Exchange Commission
Answer: C) Financial Crimes Enforcement Network (FinCEN). FinCEN is the
designated administrator of the BSA, issuing regulations, collecting reports, and
overseeing compliance. However, examination and enforcement are delegated
to the federal functional regulators (e.g., OCC, Federal Reserve, FDIC) for their
respective institutions. The SEC handles broker-dealers, but FinCEN is the overall
administrator.
Question 3
A currency transaction report (CTR) must be filed for which of the following cash
transactions?
A) Any deposit or withdrawal of more than $5,000 in a single business day
B) Any deposit, withdrawal, or exchange of currency exceeding $10,000 in a single
business day
C) Any wire transfer exceeding $3,000
D) Any check deposit over $15,000
Answer: B) Any deposit, withdrawal, or exchange of currency exceeding $10,000
in a single business day. The CTR threshold is $10,000 for cash transactions
(deposits, withdrawals, exchanges, or payments) conducted by or through a
financial institution on a single business day. A is incorrect (threshold is $10,000
not $5,000). C is incorrect (wire transfers are not currency transactions for CTR
purposes unless cash is involved). D is incorrect because checks are not cash.
Question 4
Which of the following transactions is exempt from CTR filing under the BSA's
Phase I exemption?
A) A cash deposit of $12,000 by a non-customer
B) A cash withdrawal of $10,500 by an individual for personal use
,C) A cash purchase of $11,000 by a public company listed on the NYSE
D) A cash exchange of $9,500 by a sole proprietorship
Answer: C) A cash purchase of $11,000 by a public company listed on the NYSE.
Phase I exemptions cover transactions conducted by certain established
customers, including publicly traded companies (listed on major exchanges),
banks, and government entities. The transaction must be in the ordinary course
of business. A and B are not exempt because they involve individuals or non-
customers. D is below the $10,000 threshold.
Question 5
What is the maximum time allowed for filing a CTR after a reportable transaction
occurs?
A) 15 calendar days
B) 10 business days
C) 15 business days
D) 30 calendar days
Answer: A) 15 calendar days. A CTR must be filed with FinCEN within 15 calendar
days of the date of the reportable transaction. This is a strict regulatory
deadline. Extensions are not generally granted, and late filings may result in
penalties. B and C are incorrect because the rule specifies calendar, not business,
days.
Question 6
Which of the following is a "covered financial institution" under the BSA?
A) A credit union with assets under $1 million
B) A money services business (MSB)
C) A retail store selling only gift cards
D) A law firm handling real estate closings
Answer: B) A money services business (MSB). The BSA defines covered financial
institutions broadly to include banks, credit unions, MSBs, casinos, broker-
, dealers, mutual funds, and more. Credit unions of any size are covered if they
are federally insured or federally chartered. Retail stores are not MSBs unless
they engage in money transmission or currency exchange. Law firms are
generally not covered unless they act as financial institutions.
Question 7
The BSA requires each financial institution to establish and maintain an anti-
money laundering program that includes, at a minimum:
A) Internal policies, a designated compliance officer, ongoing training, and
independent testing
B) A written risk assessment, annual board approval, and third-party audits
C) Suspicious activity reporting, currency reporting, and recordkeeping
D) Customer identification procedures, beneficial ownership collection, and
sanctions screening
Answer: A) Internal policies, a designated compliance officer, ongoing training,
and independent testing. Under 31 CFR 1020.210, the four pillars are: (1)
internal policies, procedures, and controls; (2) a designated AML compliance
officer; (3) ongoing employee training; and (4) independent testing (audit).
While the other options include important elements, they are not the statutory
minimum four pillars.
Question 8
What is the threshold for filing a Suspicious Activity Report (SAR) for a known
suspect?
A) Any transaction involving $5,000 or more
B) Any transaction involving $2,000 or more
C) Any transaction involving $10,000 or more
D) Any transaction, regardless of amount, if the institution suspects illegal activity
Answer: D) Any transaction, regardless of amount, if the institution suspects
illegal activity. For known suspects (i.e., where the institution has a reasonable
Examination Questions And Correct
Answers (Verified Answers) Plus
Rationales 2026 Q&A | Instant
Download Pdf
Question 1
Which of the following is the primary purpose of the Bank Secrecy Act (BSA)?
A) To protect consumer privacy in banking transactions
B) To prevent money laundering and terrorist financing through financial
institutions
C) To ensure banks maintain adequate capital reserves
D) To regulate interest rates on deposit accounts
Answer: B) To prevent money laundering and terrorist financing through
financial institutions. The BSA was enacted to require financial institutions to
assist U.S. government agencies in detecting and preventing money laundering,
terrorist financing, and other financial crimes. While privacy and capital reserves
are regulated elsewhere, the BSA's core focus is on anti-money laundering (AML)
and counter-terrorist financing (CTF) through recordkeeping and reporting
requirements.
Question 2
Under the BSA, which federal agency is primarily responsible for administering
and enforcing the statute for most depository institutions?
A) Federal Reserve Board
B) Office of the Comptroller of the Currency
,C) Financial Crimes Enforcement Network (FinCEN)
D) Securities and Exchange Commission
Answer: C) Financial Crimes Enforcement Network (FinCEN). FinCEN is the
designated administrator of the BSA, issuing regulations, collecting reports, and
overseeing compliance. However, examination and enforcement are delegated
to the federal functional regulators (e.g., OCC, Federal Reserve, FDIC) for their
respective institutions. The SEC handles broker-dealers, but FinCEN is the overall
administrator.
Question 3
A currency transaction report (CTR) must be filed for which of the following cash
transactions?
A) Any deposit or withdrawal of more than $5,000 in a single business day
B) Any deposit, withdrawal, or exchange of currency exceeding $10,000 in a single
business day
C) Any wire transfer exceeding $3,000
D) Any check deposit over $15,000
Answer: B) Any deposit, withdrawal, or exchange of currency exceeding $10,000
in a single business day. The CTR threshold is $10,000 for cash transactions
(deposits, withdrawals, exchanges, or payments) conducted by or through a
financial institution on a single business day. A is incorrect (threshold is $10,000
not $5,000). C is incorrect (wire transfers are not currency transactions for CTR
purposes unless cash is involved). D is incorrect because checks are not cash.
Question 4
Which of the following transactions is exempt from CTR filing under the BSA's
Phase I exemption?
A) A cash deposit of $12,000 by a non-customer
B) A cash withdrawal of $10,500 by an individual for personal use
,C) A cash purchase of $11,000 by a public company listed on the NYSE
D) A cash exchange of $9,500 by a sole proprietorship
Answer: C) A cash purchase of $11,000 by a public company listed on the NYSE.
Phase I exemptions cover transactions conducted by certain established
customers, including publicly traded companies (listed on major exchanges),
banks, and government entities. The transaction must be in the ordinary course
of business. A and B are not exempt because they involve individuals or non-
customers. D is below the $10,000 threshold.
Question 5
What is the maximum time allowed for filing a CTR after a reportable transaction
occurs?
A) 15 calendar days
B) 10 business days
C) 15 business days
D) 30 calendar days
Answer: A) 15 calendar days. A CTR must be filed with FinCEN within 15 calendar
days of the date of the reportable transaction. This is a strict regulatory
deadline. Extensions are not generally granted, and late filings may result in
penalties. B and C are incorrect because the rule specifies calendar, not business,
days.
Question 6
Which of the following is a "covered financial institution" under the BSA?
A) A credit union with assets under $1 million
B) A money services business (MSB)
C) A retail store selling only gift cards
D) A law firm handling real estate closings
Answer: B) A money services business (MSB). The BSA defines covered financial
institutions broadly to include banks, credit unions, MSBs, casinos, broker-
, dealers, mutual funds, and more. Credit unions of any size are covered if they
are federally insured or federally chartered. Retail stores are not MSBs unless
they engage in money transmission or currency exchange. Law firms are
generally not covered unless they act as financial institutions.
Question 7
The BSA requires each financial institution to establish and maintain an anti-
money laundering program that includes, at a minimum:
A) Internal policies, a designated compliance officer, ongoing training, and
independent testing
B) A written risk assessment, annual board approval, and third-party audits
C) Suspicious activity reporting, currency reporting, and recordkeeping
D) Customer identification procedures, beneficial ownership collection, and
sanctions screening
Answer: A) Internal policies, a designated compliance officer, ongoing training,
and independent testing. Under 31 CFR 1020.210, the four pillars are: (1)
internal policies, procedures, and controls; (2) a designated AML compliance
officer; (3) ongoing employee training; and (4) independent testing (audit).
While the other options include important elements, they are not the statutory
minimum four pillars.
Question 8
What is the threshold for filing a Suspicious Activity Report (SAR) for a known
suspect?
A) Any transaction involving $5,000 or more
B) Any transaction involving $2,000 or more
C) Any transaction involving $10,000 or more
D) Any transaction, regardless of amount, if the institution suspects illegal activity
Answer: D) Any transaction, regardless of amount, if the institution suspects
illegal activity. For known suspects (i.e., where the institution has a reasonable
