Regulatory Compliance and Ethics
Regulatory Compliance and Ethics tests the rules constraining how a bank takes and handles money and information, and the judgment calls behind them. Expect BSA/AML thresholds, customer due diligence, privacy and conflict-of-interest questions.
Core rules
- Currency Transaction Report: file for cash transactions exceeding $10,000 in aggregate by or for one person in one business day, generally within 15 days. Wires and checks do not count toward the cash total.
- Suspicious Activity Report: $5,000 or more where the institution knows, suspects or has reason to suspect illegal activity or no apparent lawful purpose; file within 30 days of detection (60 if no subject is identified).
- Structuring - splitting cash to stay under $10,000 - is a crime even if the underlying funds are legitimate. Never suggest it and never tell a customer a SAR was filed; tipping off is prohibited.
- Customer identification requires name, date of birth, address and an identification number, with documentary or non-documentary verification.
- Screen names against OFAC lists before onboarding and on changes.
- Reg P limits sharing nonpublic personal information with nonaffiliates; honor opt-outs and need-to-know internally.
Worked example
A customer deposits $6,500 cash, then returns two hours later with $5,000 cash. The aggregate is $11,500, so a CTR is required. If the customer says he split the deposit to 'avoid paperwork,' the bank must not proceed on that basis, must file a SAR for structuring and must not mention either filing.
Traps
- Treating exactly $10,000 as reportable; the trigger is more than $10,000.
- Counting incoming wires toward the CTR cash total.
- Discussing a SAR with the customer or in a shared workspace.
- Accepting a gift or outside interest that creates a conflict without disclosure.