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Regulatory Compliance and AML Flashcards

7 cards from real CBA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Regulatory Compliance and AML flashcards as text

  1. Which federal agency serves as the primary federal regulator for national banks and federal savings associations?

    Answer: Office of the Comptroller of the Currency (OCC)

    The OCC charters, regulates, and supervises national banks and federal savings associations, serving as their primary federal prudential regulator.

  2. In AML risk assessment, 'correspondent banking' is considered high risk primarily because:

    Answer: The bank extends services to foreign bank customers it has never directly vetted

    Correspondent banking creates nested relationships where a domestic bank serves the customers of a foreign bank without direct knowledge of those end customers' identities or risk profiles.

  3. What is 'de-risking' in the context of AML compliance, and why is it a regulatory concern?

    Answer: Terminating banking relationships with entire categories of customers deemed high-risk, potentially reducing financial inclusion

    De-risking is the wholesale termination of high-risk customer categories (e.g., money services businesses, foreign correspondent banks) instead of managing risk, which regulators criticize for reducing financial access.

  4. Under the Corporate Transparency Act (CTA) effective January 2024, most US companies must report beneficial ownership information to:

    Answer: FinCEN's Beneficial Ownership Secure System (BOSS)

    The CTA requires most US companies to report beneficial ownership information to FinCEN's secure database (BOSS), creating a federal registry of business owners.

  5. An auditor reviewing a bank's BSA program finds that the BSA Officer role has been vacant for 6 months with no documented interim assignment. This is most likely a violation of:

    Answer: The BSA requirement for a designated BSA compliance officer

    The BSA requires all financial institutions to designate a BSA compliance officer; leaving the position vacant without proper interim designation is a direct BSA program deficiency.

  6. Which type of money laundering involves inflating or deflating the price of goods in international trade invoices to transfer value across borders?

    Answer: Trade-based money laundering (TBML)

    Trade-based money laundering exploits import/export invoice manipulation — over- or under-invoicing goods — to move value across borders while appearing as legitimate commerce.

  7. Under GLBA (Gramm-Leach-Bliley Act) Safeguards Rule, banks must implement a comprehensive information security program to protect:

    Answer: Nonpublic personal information (NPI) of individual customers

    The GLBA Safeguards Rule specifically requires financial institutions to protect the nonpublic personal information (NPI) of individual consumers from unauthorized access or disclosure.