Regulatory Compliance Flashcards
7 cards from real APRP 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 flashcards as text
Which rule governs the liability shift for card-present counterfeit fraud in the U.S. EMV migration?
Answer: Card network chargeback liability shift rule
Card networks implemented a liability shift rule that transfers counterfeit fraud liability to whichever party in the transaction has not adopted EMV technology.
Under FinCEN's Customer Due Diligence (CDD) Rule, which of the following is a required element for legal entity customers?
Answer: Identification of beneficial owners with 25% or more ownership
FinCEN's CDD Rule requires financial institutions to identify and verify beneficial owners who own 25% or more of a legal entity customer.
What is the primary purpose of a Suspicious Activity Report (SAR) in the payments context?
Answer: To notify law enforcement of potentially illicit financial activity
SARs are filed with FinCEN to alert law enforcement about transactions that may involve money laundering, fraud, or other financial crimes.
Which U.S. law requires financial institutions to maintain programs for identifying and reporting transactions involving proceeds of illegal activity?
Answer: Bank Secrecy Act
The Bank Secrecy Act (BSA) of 1970 establishes the legal foundation for AML programs, including recordkeeping and reporting requirements.
An acquiring bank is held responsible for the fraudulent activity of one of its merchants. What compliance concept does this illustrate?
Answer: Acquirer liability / merchant sponsorship
Acquirer liability means that acquiring banks are responsible for ensuring their sponsored merchants comply with card network rules and applicable laws.
The Children's Online Privacy Protection Act (COPPA) affects payment companies when they:
Answer: Collect personal information from children under 13 through their platforms
COPPA requires parental consent before collecting personal information from children under 13, which can apply to payment platforms accessible to children.
What does the term 'regulatory arbitrage' mean in the payments compliance context?
Answer: Structuring operations to exploit gaps or differences between regulatory regimes
Regulatory arbitrage refers to structuring business activities to take advantage of less stringent regulations in certain jurisdictions or business models.