APRP Regulatory Environment 2 — Questions and Answers
Question 1: Under the Bank Secrecy Act (BSA), financial institutions must file a Suspicious Activity Report (SAR) within how many days of detecting a suspicious transaction?
- 15 days
- 30 days (Correct answer)
- 60 days
- 90 days
Correct answer: 30 days
The BSA requires financial institutions to file a SAR within 30 calendar days of the date they become aware of a suspicious transaction.
Question 2: Which federal agency is primarily responsible for enforcing the Bank Secrecy Act (BSA) for non-bank money services businesses (MSBs)?
- OCC
- FDIC
- FinCEN (Correct answer)
- CFPB
Correct answer: FinCEN
FinCEN (Financial Crimes Enforcement Network) is the primary federal regulator for BSA compliance at money services businesses.
Question 3: The Dodd-Frank Wall Street Reform and Consumer Protection Act created which agency specifically to regulate consumer financial products and services?
- OCC
- CFPB (Correct answer)
- FDIC
- SEC
Correct answer: CFPB
The Dodd-Frank Act established the Consumer Financial Protection Bureau (CFPB) to supervise and enforce consumer financial protection laws.
Question 4: Under Regulation E, when a consumer notifies their financial institution of an unauthorized electronic fund transfer within 2 business days, what is the maximum consumer liability?
- $0
- $50 (Correct answer)
- $500
- $2,500
Correct answer: $50
Regulation E caps consumer liability at $50 if the consumer notifies the institution within 2 business days of learning of the loss.
Question 5: Which of the following best describes the purpose of OFAC sanctions lists in the payments context?
- Setting interchange fee limits for card transactions
- Identifying individuals and entities with whom U.S. persons are prohibited from transacting (Correct answer)
- Establishing chargeback dispute timeframes for merchants
- Defining PCI DSS compliance levels for processors
Correct answer: Identifying individuals and entities with whom U.S. persons are prohibited from transacting
OFAC (Office of Foreign Assets Control) maintains sanctions lists that prohibit U.S. persons from engaging in transactions with designated individuals, entities, and countries.
Question 6: State money transmitter licenses (MTLs) are required for which type of payment entity?
- National banks processing card transactions
- Non-bank companies that transfer money on behalf of customers (Correct answer)
- Card network operators setting interchange rates
- Federal credit unions issuing debit cards
Correct answer: Non-bank companies that transfer money on behalf of customers
Non-bank companies that transmit money on behalf of consumers (e.g., PayPal, Western Union) must obtain money transmitter licenses from each applicable state.
Question 7: The USA PATRIOT Act Section 326 requires financial institutions to implement which specific program as part of BSA compliance?
- Suspicious Activity Reporting (SAR) program
- Customer Identification Program (CIP) (Correct answer)
- Currency Transaction Reporting (CTR) program
- Enhanced Due Diligence (EDD) program
Correct answer: Customer Identification Program (CIP)
Section 326 of the USA PATRIOT Act mandates that financial institutions establish a Customer Identification Program (CIP) to verify the identity of persons opening accounts.
APRP Regulatory Environment 2
Under the Bank Secrecy Act (BSA), financial institutions must file a Suspicious Activity Report (SAR) within how many days of detecting a suspicious transaction?