May 20, 2010

Credit Union Management magazine’s Web-only “On Compliance” column runs the fourth Thursday of each month.

Editor’s note: This was originally published as a post on That Credit Union Blog. Thanks to Rob Rutkowski for permission to reprint it.

I’m doing Bank Secrecy Act presentations lately, so I have BSA on my mind. I thought I would share and test your BSA knowledge. Don’t worry, there’s no grade. As a matter of fact, most of these are easy!

If you miss 1 or 2, you’re an Ace! If you miss 3 to 4, you still have a lot of BSA knowledge. If you miss 5 to 9, it’s time for your annual training. If you miss 10 or more, you really don’t do compliance, do you?

Here we go (the answers are below):

1. What does CTR stand for?

2. True or False: If an insider commits a fraud, it doesn’t matter how much money is involved, you must file a Suspicious Activity Report , or SAR.

3. True or False: The Board of Directors must be notified when the credit union files a SAR.

4. True or False: A SAR must be filed within 45 days after the investigation.

5. True or False: If a member deposits $10,500 in dimes, the CU must file a CTR.

6. What’s the amount of money that triggers the filing of a SAR on a member exhibiting suspicious activity in many instances?

7. Who is the proper party to file a SAR when there is suspicious activity at a shared branch under a shared branching agreement?

8. True or False: The Board of Directors must approve the CU’s BSA policy.

9. If a member refuses to give his or her date of birth to the CU, can an account be opened?

10. For how long must the CU maintain a descriptive record of any document used to verify identity?

11. How long do you have to file a CTR?

12. How much time do you have to report on a §314(a) request?

13. With the filing of a certain form, in what two instances can CUs share information with each other concerning SAR filings?

14. Give three examples of suspicious activity.

15. Identify one of the three stages of money laundering.

16. Should you run a beneficiary on an account through the Office of Foreign Asset Control?

17. Can you tell the person who is the subject of a SAR you filed that you filed it?

18. Do you have to file a CTR if an entity depositing cash over $10,000 qualifies for a Phase 1 CTR exemption?

19. Does law enforcement need a subpoena to get records used in completing a SAR?

20. How often do you have to file a SAR for ongoing suspicious activity?

21. True or False: SAR filings for CUs went down in 2008.

22. True or False: It is not necessary for a CU to have its BSA program independently tested.

23. True or False: It is not necessary for a CU to have a BSA officer.

24. True or False: Staff training on BSA is a required element of a BSA program.

25. If a CU files a SAR on a member, should the filing of the SAR, on its own, be the sole basis for the closing of the account?

26. If your CU has to file a CTR on a member does it also have to file a Form 8300 with FinCEN?

______________________________________________________________

Answer key:

1. Currency Transaction Report

2. True

3. True

4. False

5. True

6. $5,000

7. The agreement between the parties may specify, but it is safest for both to file.

8. True

9. No

10. Descriptions of documentary and non-documentary verification must be retained five years after the date the record is made.

11. 15 days after the transaction, generally.

12. 2 weeks.

13. Terrorism or money laundering

14. It’s endless. Of course anything illegal, but even things where the member looks like he or she is trying to evade BSA law or policy or, really, anything that doesn’t make sense or doesn’t have an explanation. Given the penalties for not filing a SAR, file them early and often.

15. Placement, layering, integration

16. Yes

17. No

18. No

19. No

20. Every 90 days.

21. False

22. False

23. False (Title isn’t the important thing. But someone must be in charge of day-to-day management of the BSA/Anti-Money Laundering program.)

24. True

25. No

26. No

Special thanks to Anthony Demangone for double checking my quiz! Special thanks to Michelle Cochran for helping me to clarify the answer to No. 10.

Rob Rutkowski is a partner with Weltman Weinberg & Reis Co LPA, Brooklyn Heights, Ohio.