True or False: Some OFAC programs require a credit union to reject transactions rather than accept and freeze funds.

The correct choice is true because certain Office of Foreign Assets Control (OFAC) programs impose strict regulations that require financial institutions, including credit unions, to reject certain transactions outright rather than allowing the transaction to proceed and only freezing the funds afterward. This is particularly relevant when a transaction involves individuals or entities listed on OFAC's Specially Designated Nationals and Blocked Persons List (SDN List) or when the transaction violates economic sanctions.

Rejecting transactions at the outset is a proactive measure to ensure compliance with federal laws aimed at preventing financing of terrorism, money laundering, and other illegal activities. Therefore, the necessity to reject transactions is based on the legal requirements imposed by particular OFAC sanctions programs that dictate how institutions should handle encounters with listed parties.