The Bank Secrecy Act Quiz! Trivia
(57).jpg "The Bank Secrecy Act Quiz! Trivia - Quiz")
Do you know anything about the Bank Secrecy Act? Do you think you can pass this quiz? The Bank Secrecy Act was legislated in 1970. It’s also identified as the Currency and Foreign Transactions Reporting Act. It is a law requiring financial institutions in the United States to assist US government agencies in protecting criminals from using financial institutions to hide or launder money. Take this quiz and discover more about the Bank Secrecy Act.
- 1.
What is money laundering?
- A.
A business that involves a high volume of cash, such as a laundromat.
- B.
A system that allows money that was obtained illegally to be legally used ONLY IF the individual is purchasing a single family, owner occupied, residential property.
- C.
Taking illegal money and hiding it for several years until it becomes legal money.
- D.
Taking illegal or "dirty" money and placing it in the financial system in an effort to make the money look legitimate, or "clean."
Correct Answer
D. Taking illegal or "dirty" money and placing it in the financial system in an effort to make the money look legitimate, or "clean."Explanation
Answer A is incorrect. While highly intensive cash businesses may give rise to hiding criminal activities, a business that involves a high volume of cash is not the definition of money laundering. Answer B is incorrect because purchasing a home with illegal money is not allowable and is considered a form of money laundering. Answer C is incorrect because the mere passage of time does not convert criminally obtained money into "legal" money.Rate this question:
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- 2.
What does FinCEN Stand for?
- A.
Financial Criminal Agency
- B.
Fishing In Canada is Nice.
- C.
Finance Crimes Election Agency
- D.
Financial Crimes Investigation Network
- E.
Financial Crimes Enforcement Network
Correct Answer
E. Financial Crimes Enforcement NetworkExplanation
FinCEN stands for Financial Crimes Enforcement Network. This agency is responsible for combating and preventing financial crimes, such as money laundering and terrorist financing, in the United States. It collects and analyzes financial information to support law enforcement investigations and ensure the integrity of the financial system.Rate this question:
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- 3.
What is the purpose of the Bank Secrecy Act?
- A.
To detect and prevent money laundering
- B.
Keep records of cash deposits, withdrawals, exchanges or an aggregate cash of more than $10,000
- C.
To alert borrowers that a SAR will be filed when criminal activity is susected
- D.
To allow banks and mortgage lenders to share information regarding criminal activity that borrowers are trying to keep secret
Correct Answer(s)
A. To detect and prevent money laundering
B. Keep records of cash deposits, withdrawals, exchanges or an aggregate cash of more than $10,000 -
- 4.
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 activities that may 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 a specific requirement of the Bank Secrecy Act.Rate this question:
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- 5.
Bank Secrecy Act requires financial institutions to file a CTR if:
- A.
Transaction exceeds $10,000
- B.
Transaction exceeds $5,000
- C.
Transaction exceeds $3,000
- D.
Transaction exceeds $1,000
Correct Answer
A. Transaction exceeds $10,000Explanation
The correct answer is "Transaction exceeds $10,000." The Bank Secrecy Act mandates that financial institutions must file a Currency Transaction Report (CTR) when a transaction exceeds $10,000. This regulation is in place to monitor and prevent money laundering and other illicit financial activities. By reporting large transactions, financial institutions can help law enforcement agencies detect and investigate suspicious activities.Rate this question:
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- 6.
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 is a requirement set by the Financial Crimes Enforcement Network (FinCEN) in the United States. Filing a CTR helps to detect and prevent money laundering and other illegal financial activities by monitoring and reporting large cash transactions. By filing the report within 15 days, financial institutions ensure timely reporting and compliance with regulatory requirements.Rate this question:
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- 7.
Which of the following is not considered an acceptable form of identification for Customer Identification Program?
- A.
U.S. Passport
- B.
Driver's License
- C.
Credit Card
- D.
None of the above
Correct Answer
C. Credit CardExplanation
A credit card is not considered an acceptable form of identification for the Customer Identification Program because it does not contain the necessary personal information and identification details, such as a photograph and signature, that are required for verifying the identity of an individual. While a U.S. Passport and Driver's License are commonly accepted forms of identification, a credit card does not meet the criteria for identification purposes.Rate this question:
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- 8.
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 5 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 SAR must be filed when there is an identifiable suspect and the transaction involves $5,000 or more. SARs are filed by financial institutions to report suspicious transactions that may indicate money laundering or other illegal activities. The threshold for filing SARs is $5,000, not $10,000.Rate this question:
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- 9.
A customer must be informed when a SAR related to his/her transaction if being filed.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
The statement is false because according to SAR (Suspicious Activity Report) regulations, financial institutions are generally prohibited from notifying customers about the filing of a SAR. This is to ensure the integrity of the investigation and prevent potential tipping off of suspicious individuals. The purpose of SARs is to report suspicious activities to the appropriate authorities for further investigation, and customer notification could compromise the effectiveness of these efforts.Rate this question:
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- 10.
A customer conducts 3 transactions on the same day and the amount of currency involved was $15,000. 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 Currency Transaction Report (CTR) must be filed as the transaction involves more than $10,000. The Bank Secrecy Act (BSA) requires financial institutions to file a CTR for any cash transaction exceeding $10,000 in a single day. In this case, the customer conducted 3 transactions on the same day, and the total amount involved was $15,000, which exceeds the threshold. Therefore, a CTR must be filed to comply with BSA regulations.Rate this question:
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- 11.
Which of the following is a possible red flag of suspicious activity?
- A.
Customer who is reluctant to provide ID
- B.
Cash transactions
- C.
Customer who requests a money transfer to a foreign country
- D.
None of the above
Correct Answer
A. Customer who is reluctant to provide IDExplanation
A customer who is reluctant to provide ID can be considered 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 a standard requirement for most legitimate transactions, and a customer's refusal to provide ID raises concerns about their intentions and credibility.Rate this question:
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- 12.
Which of the following is not a step in Money Laundering?
- A.
Spending
- B.
Integration
- C.
Placement
- D.
Layering
Correct Answer
A. SpendingExplanation
Money laundering is a process that involves making illegally obtained money appear legitimate. The three main steps in money laundering are placement, layering, and integration. Placement refers to the initial stage where the illegal funds are introduced into the financial system. Layering involves complex transactions to obscure the origin of the funds. Integration is the final step where the laundered money is reintroduced into the legitimate economy. Spending, on the other hand, is not considered a step in money laundering as it simply refers to the act of using the laundered money for personal or business expenses.Rate this question:
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Current Version
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Mar 20, 2023Quiz Edited by
ProProfs Editorial Team -
Nov 16, 2017Quiz Created by
Kathryn Smith
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