Banking Secrecy Act Red Flag Rules! Trivia Quiz
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BSA stands for ______________________.
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Breaking Sadness Amendment
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Bank Safety Act
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Bank Safety Amendment
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Bank Secrecy Act
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Explore key aspects of the Bank Secrecy Act (BSA) in this engaging trivia quiz. Test your understanding of anti-money laundering measures, compliance protocols, and the impact of financial regulations designed to combat terrorism. Essential for finance professionals and students in business law.
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- 2.
Executing financial transactions in a specific pattern calculated to avoid the creation of certain reports, such as a CTR, is considered a type of money laundering.
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True
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False
Correct Answer
A. TrueExplanation
Specifically, this is an example of structuring in money laundering.Rate this question:
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- 3.
The CU adheres to the BSA because _____________.
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We think the law is worthless.
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it protects the credit union
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It gives the credit union more money
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It is in our contract
Correct Answer
A. it protects the credit unionExplanation
The CU adheres to the BSA because it protects the credit union. The Bank Secrecy Act (BSA) is a law that requires financial institutions, including credit unions, to assist government agencies in preventing money laundering and other illegal activities. By adhering to the BSA, the credit union ensures that it is taking the necessary steps to identify and report suspicious activities, ultimately safeguarding its operations and reputation.Rate this question:
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- 4.
The original purpose of the USA Patriot Act was _________________.
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To combat terrorism
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To combat drug trafficking
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To encourage immigrants to become more patriotic
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To protect soldiers opening accounts.
Correct Answer
A. To combat terrorismExplanation
The original purpose of the USA Patriot Act was to combat terrorism. This act was passed in response to the 9/11 terrorist attacks and aimed to enhance the ability of law enforcement agencies to prevent and investigate potential terrorist activities. It granted broader surveillance powers, allowed for increased information sharing among government agencies, and expanded the authority to detain and deport suspected terrorists. The act was controversial due to concerns about civil liberties and privacy, but it was primarily designed to address the threat of terrorism within the United States.Rate this question:
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- 5.
Check the ways the CU adheres to the BSA. What do we do in order to be in compliance?
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Implements a Member Identification Program
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Participates as an EEO employer
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Maintains yearly staff compliance training
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Monitors and reports certain currency and suspicious activity.
Correct Answer(s)
A. Implements a Member Identification Program
A. Maintains yearly staff compliance training
A. Monitors and reports certain currency and suspicious activity.Explanation
The credit union adheres to the Bank Secrecy Act (BSA) by implementing a Member Identification Program, which ensures that members' identities are verified. Additionally, they maintain yearly staff compliance training to ensure that all employees are aware of the BSA requirements and how to comply with them. They also monitor and report certain currency and suspicious activity, which helps to identify and prevent potential money laundering or terrorist financing activities.Rate this question:
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- 6.
A teller would file a CTR for any cash transaction that is GREATER than $____________.
Correct Answer(s)
$10,000
$10,000.00
10,000.00
10,000
ten thousand dollars
ten thousand
10000
10000.00
$10000
$10000.00Explanation
A teller would file a Currency Transaction Report (CTR) for any cash transaction that exceeds $10,000. This is the threshold set by the Financial Crimes Enforcement Network (FinCEN) to monitor and report potentially suspicious activities that could involve money laundering or other illicit activities. The different formats and ways of expressing the amount, such as $10,000, $10,000.00, 10,000.00, 10,000, ten thousand dollars, ten thousand, 10000, 10000.00, $10000, and $10000.00 all indicate the same amount and would trigger the filing of a CTR.Rate this question:
- 7.
Louise Ester walks into the Credit Union with a check for $10,003 that she wants the Credit Union to cash. She is an essential rewards member so she will incur a $3.00 check cashing fee. Louise leaves the Credit Union with $10,000 in cash. Would you be required to fill out a CTR for this transaction?
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True
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False
Correct Answer
A. FalseExplanation
Louise is leaving with $10,000 exactly. If she left with anything more than $10,000 (such as $10,000.01), the CU would need to file a CTR.Rate this question:
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- 8.
We have ____ days to file a SAR.
Correct Answer
30
thirtyExplanation
The correct answer is 30. In the context of the question, SAR refers to Suspicious Activity Report, which is a document that financial institutions are required to file with the authorities in cases of suspected money laundering or other illegal activities. The question is asking how many days there are to file a SAR, and the correct answer is 30.Rate this question:
- 9.
You can only file a SAR for cash transactions.
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True
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False
Correct Answer
A. FalseExplanation
SARs need to be filed with ANY suspicious activity. They are not reserved for cash transactions.Rate this question:
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- 10.
Which of the following is not an example of an out of the wallet questions?
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Do you have any loans with us?
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What are the first four of your social security number?
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Do you participate in online banking?
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Where did you last use your debit card?
Correct Answer
A. What are the first four of your social security number?Explanation
The question "What are the first four of your social security number?" is not an example of an out of the wallet question because it is asking for personal information that is typically not publicly available or easily guessed. Out of the wallet questions are usually based on information that is readily accessible or known by the person being asked, such as recent transactions or activities.Rate this question:
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- 11.
What is the purpose of OFAC?
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To keep a list of celebrities and where they bank.
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To send yearly reports to the IRS about citizen's salaries.
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To fight against illegal immigration.
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To protect institutions from unknowingly doing business with terrorists.
Correct Answer
A. To protect institutions from unknowingly doing business with terrorists.Explanation
OFAC, or the Office of Foreign Assets Control, is a government agency that aims to protect institutions from unknowingly engaging in financial transactions with terrorists. They maintain a list of individuals and organizations that are involved in terrorism or other criminal activities, and they enforce economic and trade sanctions to prevent these entities from accessing funds or conducting business. By monitoring financial transactions and imposing sanctions, OFAC helps prevent the financing of terrorism and promotes national security.Rate this question:
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- 12.
Check the boxes which indicate when the CU runs an OFAC.
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When a new member opens an account.
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Immediately after a member closes their account.
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Monthly, on all current and past members.
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For all non-member transactions.
Correct Answer(s)
A. When a new member opens an account.
A. Monthly, on all current and past members.
A. For all non-member transactions.Explanation
The CU runs an OFAC when a new member opens an account to ensure that the member is not on any OFAC list. It also runs an OFAC monthly on all current and past members to continuously monitor for any changes in their status. Additionally, the CU runs an OFAC for all non-member transactions to prevent any potential illegal activities involving non-members.Rate this question:
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- 13.
When an OFAC is run and a match is found, you need to let the member know immediately so they can fix the issue.
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True
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False
Correct Answer
A. FalseExplanation
DO NOT tell the member we have a hit on them. It could be a false positive.Rate this question:
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- 14.
Link Hugh comes to your window to make a cash deposit of $1200. You notice that he has deposited $1000 or $1200 in cash into his savings account during the last 7 days, which is unusual for him. His deposits bring the total amount of cash to $8800. What should you do?
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No action is needed
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File a CTR
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Call over to your manager to discuss her account in front of her
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File a SAR Initiation Request and not tell her.
Correct Answer
A. File a SAR Initiation Request and not tell her.Explanation
Based on the information provided, it is unusual for Link Hugh to deposit such a large amount of cash into his savings account within a short period of time. This could potentially be a suspicious activity that requires further investigation. Therefore, filing a SAR (Suspicious Activity Report) Initiation Request is the appropriate action to take. It is important to follow proper procedures and not inform the customer to avoid tipping them off and potentially interfering with the investigation.Rate this question:
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- 15.
Check all the examples of suspicious or unusual account activity.
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Member change of address 4 times in the last month
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Member updating phone number in person
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Returned mail
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Late payments without previous history of late payments
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Numerous credit inquiries
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Member requesting a change of address form
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Member making an early payment
Correct Answer(s)
A. Member change of address 4 times in the last month
A. Returned mail
A. Late payments without previous history of late payments
A. Numerous credit inquiriesExplanation
The examples of suspicious or unusual account activity include a member changing their address four times in the last month, returned mail, late payments without any previous history of late payments, and numerous credit inquiries. These activities may indicate potential fraud or unauthorized access to the account.Rate this question:
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- 16.
You are looking at a member's account and notice they don't have an updated ID. You ask for a current ID and the member informs you it is coming in the mail. What are the appropriate steps to complete the transaction?
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Tell the member that you'll "let it slide" this time and proceed with the transaction.
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Inform the member you cannot bend the rules and she will need to wait until she has an updated license. You then tracker this in Gold
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Look at previous IDs in her account to conclude she is the correct person on the account. Once you see other IDs on file, you do the transaction. Then you proceed to make a tracker in Gold specifying a transaction was done and the member will bring an updated ID next time.
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Excuse yourself to speak with your manager then ask your manager if it is permissible to continue for this one-time transaction, which they confirm it is. Then you proceed to make a tracker in Gold specifying a transaction was done and the member will bring an updated ID next time.
Correct Answer
A. Excuse yourself to speak with your manager then ask your manager if it is permissible to continue for this one-time transaction, which they confirm it is. Then you proceed to make a tracker in Gold specifying a transaction was done and the member will bring an updated ID next time.Explanation
The appropriate steps to complete the transaction in this scenario would be to excuse yourself to speak with your manager and ask for permission to continue with the transaction despite the member not having an updated ID. Once your manager confirms that it is permissible for this one-time transaction, you proceed with the transaction. Afterward, you make a tracker in Gold to document that a transaction was done and the member will bring an updated ID next time. This ensures that the transaction is completed while also following the necessary protocols and documenting the situation for future reference.Rate this question:
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Quiz Review Timeline (Updated): Jan 18, 2023 +
Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.
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Current Version
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Jan 18, 2023Quiz Edited by
ProProfs Editorial Team -
Sep 14, 2015Quiz Created by
Catherine Halcomb
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