CFA Bank Secrecy Act & SAR Filing 2 — Questions and Answers
Question 1: Under the Bank Secrecy Act, what is the minimum threshold for filing 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 bank customer conducts five separate $3,000 cash deposits on the same day to avoid CTR reporting. This activity is known as:
- Layering
- Structuring (smurfing) (Correct answer)
- Integration
- Placement
Correct answer: Structuring (smurfing)
Structuring, or smurfing, involves breaking up transactions to stay below reporting thresholds, which is itself a federal crime under the BSA.
Question 3: Which federal agency serves as the administrator of the Bank Secrecy Act and receives BSA filings?
- FBI
- SEC
- FinCEN (Correct answer)
- OCC
Correct answer: FinCEN
The Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Treasury, administers the BSA and collects BSA reports.
Question 4: A SAR must generally be filed within how many calendar days after a suspicious activity is initially detected?
- 15 days
- 30 days (Correct answer)
- 60 days
- 90 days
Correct answer: 30 days
Financial institutions must file a SAR within 30 calendar days of initial detection of suspicious activity, with a 60-day extension if no suspect is identified.
Question 5: Which of the following is NOT a covered financial institution required to file SARs under BSA regulations?
- Federally insured credit unions
- Money services businesses
- Retail clothing stores (Correct answer)
- Broker-dealers in securities
Correct answer: Retail clothing stores
Retail businesses like clothing stores are not covered financial institutions under the BSA and have no SAR filing obligation.
Question 6: The 'tipping off' prohibition in the BSA means that a financial institution:
- Must notify the customer before filing a SAR
- Cannot disclose to the subject that a SAR has been filed (Correct answer)
- Must tip off law enforcement before filing a SAR
- Should notify other banks of suspicious customers
Correct answer: Cannot disclose to the subject that a SAR has been filed
The BSA explicitly prohibits financial institutions from disclosing to the subject of a SAR that a report has been filed, protecting the integrity of investigations.
Question 7: A SAR filed by a bank employee in good faith is protected from civil liability under which BSA provision?
- Mandatory disclosure rule
- Safe harbor provision (Correct answer)
- Whistleblower exception
- Confidentiality waiver
Correct answer: Safe harbor provision
The BSA's safe harbor provision protects financial institutions and their employees from civil liability when filing SARs in good faith.
CFA Bank Secrecy Act & SAR Filing 2
Under the Bank Secrecy Act, what is the minimum threshold for filing a Currency Transaction Report (CTR)?