What does BSA/AML stand for, and what are two core requirements credit unions must meet under it?

What does BSA/AML stand for, and what are two core requirements credit unions must meet under it?

• A. Bank Secrecy Act/Anti-Money Laundering; requirements include customer due diligence/KYC and ongoing transaction monitoring with suspicious activity reporting.
• B. Bank Safety Act/Anti-Money Laundering; requires know-your-customer only.
• C. Bank Secrecy Act/Anti-Money Laundering; requires only periodic risk assessments.
• D. Bank Secrecy Act/Anti-Money Laundering; only suspicious activity reporting is required.

Answer: (A)

The test is about what BSA/AML requires to prevent money laundering. BSA/AML stands for Bank Secrecy Act and Anti-Money Laundering. The best answer highlights two core requirements: establishing customer due diligence (KYC) and ongoing transaction monitoring with the reporting of suspicious activity. Know Your Customer means identifying and verifying who the customer is, understanding the nature of their business, and assessing the risk they may pose for money laundering. Ongoing monitoring means continuously reviewing customer transactions for unusual or inappropriate activity and filing Suspicious Activity Reports when something suspicious is detected. These pieces work together to detect and deter illicit finance. Options that misname the act or reduce requirements to a single element aren’t correct. For example, replacing it with a non-existent act or saying only KYC, or only risk assessments, or only SARs are required, would not reflect the full scope of BSA/AML obligations.

The test is about what BSA/AML requires to prevent money laundering. BSA/AML stands for Bank Secrecy Act and Anti-Money Laundering. The best answer highlights two core requirements: establishing customer due diligence (KYC) and ongoing transaction monitoring with the reporting of suspicious activity.

Know Your Customer means identifying and verifying who the customer is, understanding the nature of their business, and assessing the risk they may pose for money laundering. Ongoing monitoring means continuously reviewing customer transactions for unusual or inappropriate activity and filing Suspicious Activity Reports when something suspicious is detected. These pieces work together to detect and deter illicit finance.

Options that misname the act or reduce requirements to a single element aren’t correct. For example, replacing it with a non-existent act or saying only KYC, or only risk assessments, or only SARs are required, would not reflect the full scope of BSA/AML obligations.