CAM Regulatory Compliance 2 — Questions and Answers
Question 1: Under the Bank Secrecy Act (BSA), what is the dollar threshold that triggers a Currency Transaction Report (CTR)?
- $5,000
- $10,000 (Correct answer)
- $25,000
- $50,000
Correct answer: $10,000
Financial institutions must file a CTR for cash transactions exceeding $10,000 in a single business day.
Question 2: A client structures multiple cash deposits of $9,500 each over several days to avoid CTR reporting. This practice is known as:
- Layering
- Integration
- Structuring (Correct answer)
- Placement
Correct answer: Structuring
Structuring (also called 'smurfing') is the illegal practice of breaking large transactions into smaller amounts to evade reporting requirements.
Question 3: Which federal agency is primarily responsible for enforcing the Bank Secrecy Act?
- SEC
- FDIC
- FinCEN (Correct answer)
- OCC
Correct answer: FinCEN
The Financial Crimes Enforcement Network (FinCEN) administers and enforces the BSA on behalf of the Treasury Department.
Question 4: Under Regulation Z (Truth in Lending), what must be prominently disclosed before a consumer credit account is opened?
- The lender's internal credit scoring model
- The Annual Percentage Rate and key loan terms (Correct answer)
- The borrower's FICO score
- The institution's reserve requirements
Correct answer: The Annual Percentage Rate and key loan terms
Regulation Z requires lenders to clearly disclose the APR and material terms so consumers can compare credit offers.
Question 5: A Suspicious Activity Report (SAR) must generally be filed within how many calendar days of detecting a suspicious transaction?
- 15 days
- 30 days (Correct answer)
- 45 days
- 60 days
Correct answer: 30 days
Financial institutions are required to file a SAR within 30 days (extendable to 60 days with written notice) of detecting a suspicious transaction.
Question 6: Which regulation implements the Community Reinvestment Act, requiring banks to meet the credit needs of all segments of their communities?
- Regulation B
- Regulation BB (Correct answer)
- Regulation E
- Regulation CC
Correct answer: Regulation BB
Regulation BB implements the CRA, outlining how banks must document and demonstrate their lending in low- and moderate-income communities.
Question 7: The 'red flag rules' under FACTA require financial institutions to implement programs to detect and respond to indicators of:
- Money laundering
- Identity theft (Correct answer)
- Insider trading
- Tax evasion
Correct answer: Identity theft
FACTA's Red Flag Rules require covered entities to create written programs for identifying and responding to identity theft warning signs.
CAM Regulatory Compliance 2
Under the Bank Secrecy Act (BSA), what is the dollar threshold that triggers a Currency Transaction Report (CTR)?