Loan Officer Practice Exam

Which of the following is NOT a component of the BSA/AML Act for lenders in terms of money laundering prevention?

1. Requiring identification of the consumer

2. Verifying information provided by the consumer

3. Being alert to any suspicious activity

4. Implementing a written identity theft prevention program

The correct answer is: Implementing a written identity theft prevention program

The assertion that implementing a written identity theft prevention program is not a component of the BSA/AML (Bank Secrecy Act/Anti-Money Laundering) Act is accurate because the BSA and AML frameworks primarily focus on preventing money laundering and ensuring that financial institutions report suspicious activities, rather than specifically addressing identity theft. The BSA/AML regulations emphasize the importance of customer due diligence, which includes knowing your customer and maintaining thorough records to identify and report suspicious behavior effectively. This encompasses requirements such as identifying customers, verifying the information they provide, and being aware of unusual or suspicious activity that could indicate money laundering or related financial crimes. While identity theft prevention is a critical aspect of the banking and lending industry, it falls under different regulations focused explicitly on consumer protection and data security, rather than the money laundering prevention objectives of the BSA/AML Act. Thus, a written identity theft prevention program, while important, does not directly relate to the core components of BSA/AML compliance for lenders.