Certified Regulatory Compliance Manager (CRCM) — Question 214

James Walker DBA Walker Enterprises has been a customer of the bank for one month. The company told the bank that it would regularly make deposits in excess of $10,000 because it operates several laundromats in the city. The bank performed a background check on the company before opening the account. For its first 30 days, the company made 12 large cash deposits. Can the bank exempt this company now? Why or why not?

Answer options

• A. No. It is a not a corporation, but a sole proprietorship.
• B. No. It has not maintained an account at the bank for 12 months.
• C. No. It operates an ineligible business.
• D. Yes. The bank conducted due diligence on the customer to determine that it had legitimate large cash transactions.

Correct answer: D

Explanation

The correct answer is D because the bank's due diligence in assessing the legitimacy of the large cash transactions allows for an exemption. Answer A is incorrect as the business structure does not determine exemption eligibility. Answer B is wrong because the duration of account maintenance is not the only factor for exemption. Answer C is incorrect as laundromats are typically considered eligible businesses.