What is one criterion a non-listed business must meet under Phase II designation?

The correct answer highlights an important criterion for a non-listed business under Phase II designation. A non-listed business must maintain a transaction account with the credit union for at least two months to be eligible under this designation. This requirement establishes a consistent banking relationship, which helps credit unions monitor the business's activities effectively and ensures that there is an ongoing record of transactions that can be reviewed for compliance with the Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) regulations.

The rationale behind maintaining a transaction account for a minimum period is that it allows financial institutions to better assess the business's transaction patterns and overall financial behavior. This monitoring is essential in identifying potentially suspicious activities that could warrant further investigation or reporting.

Understanding this requirement is crucial for ensuring compliance with BSA standards, as it enables credit unions to have a more thorough understanding of their non-listed business clients and their financial activities over time.