A mortgage company files a SAR regarding a borrower suspected of submitting fraudulent income documents. The borrower later asks the MLO directly whether a report was filed about them. Under the Bank Secrecy Act, how must the MLO respond?

Question

Accepted Answer

The MLO may neither confirm nor deny that a SAR was filed The Bank Secrecy Act includes a strict 'tipping off' prohibition. Once a SAR has been filed, the institution and its employees are legally prohibited from disclosing — directly or indirectly — that a SAR was filed or that suspicious activity was reported. The MLO must neither confirm nor deny the existence of a SAR. Confirming that a report was filed, even without details, violates the tipping-off rule. Providing a copy of the SAR is expressly prohibited. Referring the borrower to the compliance officer does not resolve the obligation — the prohibition applies institution-wide, not just to the MLO individually.

A mortgage company files a SAR regarding a borrower suspected of submitting fraudulent income documents. The borrower later asks the MLO directly whether a report was filed about them. Under the Bank Secrecy Act, how must the MLO respond?

Drill 2,078 more questions like this, free

More Ethics practice questions

Free practice by category