Complianceonline Bank Secrecy Act Quiz
This short quiz tests your knowledge on the reporting requirements of the Bank Secrecy Act.
Questions and Answers
- 1.
Which of the following is not a requirement of the Bank Secrecy Act?
- A.
Report suspicious activity that might signify money laundering, tax evasion, or other criminal activities
- B.
Implement a written, board-approved compliance monitoring program
- C.
Keep records of all cash transactions
- D.
None of the above
Correct Answer
C. Keep records of all cash transactionsExplanation
The Bank Secrecy Act requires financial institutions to report suspicious activity that might indicate money laundering, tax evasion, or other criminal activities. It also mandates the implementation of a written, board-approved compliance monitoring program. However, keeping records of all cash transactions is not explicitly mentioned as a requirement of the Bank Secrecy Act. Therefore, the correct answer is "Keep records of all cash transactions."Rate this question:
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- 2.
Bank Secrecy Act requires financial institutions to file CTR if:
- A.
Transaction exceeds $10,000
- B.
Transaction exceeds $5,000
- C.
Transaction exceeds $3,000
- D.
None of the above
Correct Answer
A. Transaction exceeds $10,000Explanation
The Bank Secrecy Act requires financial institutions to file a Currency Transaction Report (CTR) if a transaction exceeds $10,000. This reporting requirement helps to detect and prevent money laundering and other financial crimes. By monitoring large transactions, financial institutions can identify suspicious activities and report them to the appropriate authorities for further investigation.Rate this question:
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- 3.
How long should financial institutions retain CTRs to comply with the Bank Secrecy Act?
- A.
1 year
- B.
3 years
- C.
5 years
- D.
7 years
Correct Answer
C. 5 yearsExplanation
Financial institutions should retain Currency Transaction Reports (CTRs) for a period of 5 years to comply with the Bank Secrecy Act. This act requires financial institutions to report any cash transactions over $10,000 to the Financial Crimes Enforcement Network (FinCEN). By retaining the CTRs for 5 years, financial institutions can ensure that they have the necessary records to comply with anti-money laundering regulations and provide them to law enforcement agencies if required for investigations or audits.Rate this question:
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- 4.
When should financial institutions file a CTR?
- A.
Within 20 days from the date of transaction
- B.
Within 15 days from the date of transaction
- C.
Within 10 days from the date of transaction
- D.
Within 25 days from the date of transaction
Correct Answer
B. Within 15 days from the date of transactionExplanation
Financial institutions should file a CTR (Currency Transaction Report) within 15 days from the date of the transaction. This report is required by the Financial Crimes Enforcement Network (FinCEN) to monitor and prevent money laundering and other financial crimes. Filing the CTR within this timeframe allows for timely reporting and analysis of suspicious transactions, ensuring compliance with regulatory requirements and assisting in the detection of potential illicit activities.Rate this question:
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- 5.
Which of the following is not considered an acceptable form of identification for an individual when completing a CTR?
- A.
U.S. passport
- B.
Driver’s license
- C.
Long-term deposit account relationship
- D.
None of the above
Correct Answer
C. Long-term deposit account relationshipExplanation
A long-term deposit account relationship is not considered an acceptable form of identification for an individual when completing a CTR. This is because a long-term deposit account relationship does not provide sufficient proof of the individual's identity. Acceptable forms of identification for a CTR typically include a U.S. passport or a driver's license, as these documents are more commonly recognized and provide reliable proof of identity.Rate this question:
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- 6.
Which of the following statements about SAR is incorrect?
- A.
SAR must be filed when there is an identifiable suspect and the transaction involves $5,000 or more
- B.
SAR must be filed when there is no identifiable suspect and the transaction involves $10,000 or more
- C.
Copies of SARs and supporting documentation should be retained for five years from the date of filing the SAR
- D.
None of the above
Correct Answer
B. SAR must be filed when there is no identifiable suspect and the transaction involves $10,000 or moreExplanation
The correct answer is "SAR must be filed when there is no identifiable suspect and the transaction involves $10,000 or more." This statement is incorrect because SARs must be filed when there is an identifiable suspect and the transaction involves $5,000 or more. SARs are Suspicious Activity Reports that financial institutions are required to file with the Financial Crimes Enforcement Network (FinCEN) to report suspicious transactions that may indicate money laundering, terrorist financing, or other illegal activities.Rate this question:
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- 7.
A customer must be informed when SAR related to his transaction is being filed.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
Customers are not required to be informed when a Suspicious Activity Report (SAR) related to their transaction is being filed. SARs are filed by financial institutions to report any suspicious or potentially illegal activities to the appropriate authorities. However, the process is typically kept confidential to avoid tipping off potential criminals and to allow for a thorough investigation. Therefore, the statement is false.Rate this question:
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- 8.
How often do you have to file a SAR for ongoing suspicious activity?
- A.
Every 30 days
- B.
Every 60 days
- C.
Every 90 days
- D.
Every 45 days
Correct Answer
C. Every 90 daysExplanation
A Suspicious Activity Report (SAR) is a tool used by financial institutions to report suspicious transactions or activities that may indicate money laundering or other illegal activities. Filing SARs is a legal requirement for financial institutions to help combat financial crimes. The correct answer is "Every 90 days" because it indicates that financial institutions need to file a SAR for ongoing suspicious activity every 90 days, ensuring regular monitoring and reporting of potential illicit activities.Rate this question:
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- 9.
A customer conducts three transactions on the same day and the amount of currency involved was $15000. Which of the following is required to comply with BSA?
- A.
SAR must be filed as the transaction involves more than $5,000
- B.
CTR must be filed as the transaction involves more than $10,000
- C.
Both SAR and CTR must be filed
- D.
None of the above
Correct Answer
B. CTR must be filed as the transaction involves more than $10,000Explanation
The correct answer is that a CTR (Currency Transaction Report) must be filed as the transaction involves more than $10,000. The Bank Secrecy Act (BSA) requires financial institutions to report any transaction that involves more than $10,000 in currency. In this case, the customer conducted three transactions on the same day, and the total amount involved was $15,000, which exceeds the reporting threshold. Therefore, a CTR must be filed to comply with BSA regulations.Rate this question:
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- 10.
Which of the following is the possible red flag of suspicious activity?
- A.
Cash transactions
- B.
Customer who request a money transfer to a foreign country
- C.
Customer who is reluctant to provide ID
- D.
None of the above
Correct Answer
C. Customer who is reluctant to provide IDExplanation
A customer who is reluctant to provide ID can be a red flag of suspicious activity because it may indicate that the customer is trying to hide their true identity or engage in illegal activities. Proper identification is typically required for most financial transactions to ensure compliance with anti-money laundering and know your customer regulations. Therefore, a customer's reluctance to provide ID raises concerns and may warrant further investigation to prevent potential fraudulent or criminal activities.Rate this question:
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- 11.
Jack, a XYZ Bank customer, withdraws $5,000 in cash from his account. He then accesses his safe deposit box at the bank. Should the bank officials flag this as suspicious activity?
- A.
Yes
- B.
No
Correct Answer
A. YesExplanation
Yes, the bank officials should flag this as suspicious activity. The withdrawal of a large amount of cash followed by accessing the safe deposit box could indicate potential money laundering or illegal activities. It is important for banks to monitor and report any suspicious transactions to prevent financial crimes and protect their customers and the integrity of the banking system.Rate this question:
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- 12.
Which of the following businesses would be eligible for currency transaction reporting exemptions under the requirements of the Bank Secrecy Act?
- A.
Law and accounting firms
- B.
Motor vehicles dealership
- C.
Real estate brokerage
- D.
Sea food restaurant
Correct Answer
D. Sea food restaurantExplanation
A seafood restaurant would be eligible for currency transaction reporting exemptions under the requirements of the Bank Secrecy Act because it is not considered a financial institution or a business that engages in financial transactions. Law and accounting firms, motor vehicle dealerships, and real estate brokerages are all businesses that typically handle large amounts of cash and are therefore subject to currency transaction reporting requirements.Rate this question:
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