Bank Secrecy Act Compliance
Question
An individual comes into the bank and makes a $6,000 cash deposit into a checking account. At the same time, the individual buys a $7,000 cashier's check with cash. According to the Bank Secrecy Act, what is the bank is required to do?
Answers
Explanations
Click on the arrows to vote for the correct answer
A. B. C. D.D
The Bank Secrecy Act (BSA) is a federal law that requires financial institutions to assist government agencies in detecting and preventing money laundering and other illegal activities. As per the given scenario, an individual has made a $6,000 cash deposit into a checking account and bought a $7,000 cashier's check with cash. The bank is required to follow the BSA guidelines and take certain actions.
Option A: File a SAR for $13,000 A Suspicious Activity Report (SAR) is filed when a bank suspects that a transaction or a series of transactions might be related to illegal activity. In this case, there is no indication that the transactions are suspicious, so the bank is not required to file a SAR.
Option B: File a CTR for the $6,000 cash deposit A Currency Transaction Report (CTR) must be filed for any transaction involving cash in excess of $10,000. In this case, the cash deposit of $6,000 does not exceed the $10,000 threshold, so the bank is not required to file a CTR for this transaction.
Option C: Aggregate the transactions and retain information about the purchase of the cashier's check Under the BSA, financial institutions are required to aggregate transactions that are conducted by, or on behalf of, the same person and that occur within a 24-hour period. The bank is required to retain information about the purchase of the cashier's check, which may include the name and address of the purchaser, the amount of the check, and the account number used to purchase the check.
Option D: Obtain the recordkeeping information for the purchase of the cashier's check and complete a CTR for the total cash-in transaction of $13,000 Since the purchase of the cashier's check involves cash in excess of $10,000, the bank is required to obtain recordkeeping information for this transaction, including the name and address of the purchaser, the amount of the check, and the account number used to purchase the check. The bank is also required to complete a CTR for the total cash-in transaction of $13,000, which includes both the $6,000 cash deposit and the $7,000 cashier's check purchase.
Therefore, the correct answer is Option D: Obtain the recordkeeping information for the purchase of the cashier's check and complete a CTR for the total cash-in transaction of $13,000.
