The local manager of a remote mortgage origination department of a financial institution has just discovered that sanctions screening of new customers is not being performed.
Which action should the local manager take in this situation?
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A. B. C. D.C
In the given scenario, the local manager of a remote mortgage origination department has discovered that sanctions screening of new customers is not being performed. This is a serious compliance issue, as financial institutions are required to conduct sanctions screening to ensure they are not doing business with individuals or entities on sanctions lists maintained by government agencies or international bodies.
Option A, which suggests starting screening new customers, may be a reasonable course of action to take in the short term. However, it does not address the fact that the financial institution has already potentially violated sanctions regulations by not conducting the required screening in the first place. Therefore, this action alone may not be sufficient.
Option B, which suggests immediately informing the regulators, may also be a necessary step depending on the nature and severity of the situation. Failure to comply with sanctions regulations can result in significant financial penalties, reputational damage, and even criminal charges in some cases. Therefore, it is important to notify the relevant regulators promptly to minimize potential harm.
Option C, which suggests immediately informing senior management, is also a critical step. Senior management is responsible for ensuring that the financial institution complies with all relevant laws and regulations, and may need to take remedial action or make changes to existing policies and procedures to prevent future violations.
Option D, which suggests doing nothing because the department only handles a very small number of mortgages, is not a viable option. Even if the department handles a small number of mortgages, failure to comply with sanctions regulations is still a serious compliance issue that could result in significant legal and reputational consequences.
In summary, the local manager should consider taking all of the following actions in response to the discovery that sanctions screening of new customers is not being performed: