BSACS EXAM PREP QUESTIONS & ANSWERS
What are the five pillars of an effective BSA/AML compliance program? - Answers :1.
Designation of a BSA compliance officer by the Board.
2. Provide for a system of internal controls to ensure ongoing compliance
3. Provide for independent testing to be conducted by credit union personnel or outside
parties
4. Provide training for appropriate personnel
5. Appropriate risk-based procedures for conducting ongoing member due diligence
Who all is required to receive BSA/AML training? - Answers :New staff, BSA
Compliance Officer, Board of Directors, and all appropriate personnel
True/False: BSA/AML training should be tailored to the person's specific responsibilities
- Answers :True
How often does BSA training need to be conducted? - Answers :Every 12 to 18 months
What records of the BSA training program do credit unions need to keep? - Answers
:Records of training and testing materials, the dates of training sessions and attendance
records.
True/False: The credit union's board of directors is ultimately responsible for the credit
union's BSA compliance? - Answers :True
The BSA Officer must be knowledgeable of:
a. 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 :f. all of the above
True/False: If you are a small credit union it is acceptable to have the BSA officer
determine when a CTR is necessary, fil out the CTRs, and determine who is eligible for
a CTR exemption. - Answers :False
Regulators recommend that independent test of your BSA program should be done:
a. Annually
b. Every 12 to 18 months
c. Whenever necessary
d. Before each exam - Answers :b. Every 12 to 18 months
Which of the following products and services could possibly pose a higher risk for illegal
activities?
a. Wire transfers
, b. Monetary instruments
c. Traveler's checks
d. All of the above - Answers :d. All of the above
Section 326 of the USA Patriot Act requires financial institutions to: - Answers :1.
implement reasonable procedures to verify the identity of any person seeking to open
an account
2. maintain records of the information used to verify the person's identity
3. determine whether the person appears on any lists of known or suspected terrorists
or terrorist organizations provided to the FI by any government agency
4. provide the member opening a new account with notice of the information collection
requirement.
Some requirements of the MDD are similar to the CIP requirements. What additional
requirements does MDD require credit unions to do? - Answers :1. gain an
understanding of the nature and purpose of member relationships and under your
member's normal and expected transaction activity, based on their occupation or
business operations, so that you can better determine if something is suspicious, and
whether a SAR needs to be filed;
2. keep an eye out for indicators of potential changes in the member's risk profile, for
example a change in employment, a change in business operations, or unexpected
account activity;
3. include procedures to periodically monitor your member's information
4. on a risk basis, maintain and update member information - including information
regarding the beneficial owners of legal entity members.
How does the CDD/MDD rules define "legal entity"? - Answers :The rule defines a "legal
entity" as a corporation, LLC, or other entity that is created by the filing of public
document with a Secretary of State or similar office; a general partnership or similar
entity.
What are considered NOT legal entities? - Answers :sole proprietorships,
unincorporated associations, or natural persons opening accounts on their own behalf
What entities are only subject to the control criteria prong in the definition of "beneficial
owner"? - Answers :1. any legal entity that is established as a non-profit corporation or
similar entity and has filed its organizational documents with the appropriate State
authority;
2. any legal entity only to the extent that it opens a private banking account subject to
BSA requirements;
3. any pooled investment vehicle that is not exempt.
What are the two prongs that the CDD/MDD rules defines as "beneficial owner"? -
Answers :Ownership criteria and Control criteria
What are the five pillars of an effective BSA/AML compliance program? - Answers :1.
Designation of a BSA compliance officer by the Board.
2. Provide for a system of internal controls to ensure ongoing compliance
3. Provide for independent testing to be conducted by credit union personnel or outside
parties
4. Provide training for appropriate personnel
5. Appropriate risk-based procedures for conducting ongoing member due diligence
Who all is required to receive BSA/AML training? - Answers :New staff, BSA
Compliance Officer, Board of Directors, and all appropriate personnel
True/False: BSA/AML training should be tailored to the person's specific responsibilities
- Answers :True
How often does BSA training need to be conducted? - Answers :Every 12 to 18 months
What records of the BSA training program do credit unions need to keep? - Answers
:Records of training and testing materials, the dates of training sessions and attendance
records.
True/False: The credit union's board of directors is ultimately responsible for the credit
union's BSA compliance? - Answers :True
The BSA Officer must be knowledgeable of:
a. 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 :f. all of the above
True/False: If you are a small credit union it is acceptable to have the BSA officer
determine when a CTR is necessary, fil out the CTRs, and determine who is eligible for
a CTR exemption. - Answers :False
Regulators recommend that independent test of your BSA program should be done:
a. Annually
b. Every 12 to 18 months
c. Whenever necessary
d. Before each exam - Answers :b. Every 12 to 18 months
Which of the following products and services could possibly pose a higher risk for illegal
activities?
a. Wire transfers
, b. Monetary instruments
c. Traveler's checks
d. All of the above - Answers :d. All of the above
Section 326 of the USA Patriot Act requires financial institutions to: - Answers :1.
implement reasonable procedures to verify the identity of any person seeking to open
an account
2. maintain records of the information used to verify the person's identity
3. determine whether the person appears on any lists of known or suspected terrorists
or terrorist organizations provided to the FI by any government agency
4. provide the member opening a new account with notice of the information collection
requirement.
Some requirements of the MDD are similar to the CIP requirements. What additional
requirements does MDD require credit unions to do? - Answers :1. gain an
understanding of the nature and purpose of member relationships and under your
member's normal and expected transaction activity, based on their occupation or
business operations, so that you can better determine if something is suspicious, and
whether a SAR needs to be filed;
2. keep an eye out for indicators of potential changes in the member's risk profile, for
example a change in employment, a change in business operations, or unexpected
account activity;
3. include procedures to periodically monitor your member's information
4. on a risk basis, maintain and update member information - including information
regarding the beneficial owners of legal entity members.
How does the CDD/MDD rules define "legal entity"? - Answers :The rule defines a "legal
entity" as a corporation, LLC, or other entity that is created by the filing of public
document with a Secretary of State or similar office; a general partnership or similar
entity.
What are considered NOT legal entities? - Answers :sole proprietorships,
unincorporated associations, or natural persons opening accounts on their own behalf
What entities are only subject to the control criteria prong in the definition of "beneficial
owner"? - Answers :1. any legal entity that is established as a non-profit corporation or
similar entity and has filed its organizational documents with the appropriate State
authority;
2. any legal entity only to the extent that it opens a private banking account subject to
BSA requirements;
3. any pooled investment vehicle that is not exempt.
What are the two prongs that the CDD/MDD rules defines as "beneficial owner"? -
Answers :Ownership criteria and Control criteria
