Compliance, Consumer Protection, and BSA/AML
This domain blends consumer protection statutes with anti-money-laundering obligations. Candidates must recognize the purpose and core requirement of each regulation.
Bank Secrecy Act / AML: credit unions must maintain a written AML program with four pillars - a designated compliance officer, internal controls, ongoing training, and independent testing. Customer Identification Program (CIP) requires identity verification at account opening. Currency Transaction Reports (CTRs) are filed for cash transactions over $10,000 (aggregated by day). Suspicious Activity Reports (SARs) are filed for suspected illegal activity; the threshold is generally $5,000 for credit unions, and SAR confidentiality is strict - never tell the member.
Consumer protection: Regulation Z (Truth in Lending), Regulation E (electronic transfers), Regulation B (Equal Credit Opportunity - prohibits discrimination and requires adverse action notices), Regulation CC (funds availability), RESPA (real estate settlement), HMDA (mortgage data reporting), and Fair Credit Reporting Act (credit reporting accuracy and permissible purpose). The Community Reinvestment Act applies to banks; credit unions have a related but distinct member-service obligation - do not assume CRA applies identically.
Worked example: A member makes three cash deposits of $4,000 each on the same business day. Total cash = $12,000, exceeding $10,000, so a CTR is required - aggregation by day is the trap. If the member structured deposits specifically to avoid the threshold, a SAR is also appropriate.
Other traps: confusing SAR with CTR; assuming SARs are disclosed to the subject; and mixing up Reg B (credit) with Reg E (electronic transfers).