True or False: Some OFAC-administered programs require credit unions to reject transactions instead of blocking them.

The assertion is true because certain programs administered by the Office of Foreign Assets Control (OFAC) mandate that financial institutions, including credit unions, must reject specific transactions involving individuals or entities that are on the Specially Designated Nationals and Blocked Persons (SDN) list or subject to other sanctions. In cases where the transaction cannot take place without breaching these regulations, the institution is required to reject the transaction rather than simply blocking it.

This rejection serves to prevent the facilitation of transactions that could further the objectives of sanctioned persons or entities. It is a specific compliance requirement that differs from blocking, which would involve the financial institution preventing access to funds or assets that are already in their control due to sanctions.

This understanding highlights the importance of credit unions implementing robust compliance systems to ensure adherence to OFAC regulations, which may vary depending on the nature of the transaction and the entities involved.