2020 Journal of Community Bank Studies

2020 COMMUNITY BANK CASE STUDY COMPETITION

2.7 Section Summary F&M Bank is currently operating as best it can given the current guidelines and its limited set of resources. F&M is unique in that it was quick to get on board with hemp legislation, despite generally avoiding riskier businesses. Its small team works diligently and prudently to ensure optimal performance. There are challenges, but hard work helps the team to push through. 3. Technology & Innovation 3.1 Section Overview This section addresses the effectiveness of F&M’s current BSA monitoring platforms and how the bank suggests BSA compliance could be more efficient. In a meeting with the BSA compliance team at F&M, the team suggested several changes to the current BSA framework. To get a better understanding of universal concerns regarding the BSA, we researched issues that plague community banks’ BSA compliance through interviews and case studies. Finally, to understand how these changes may be implemented at the legislative level, we met with a Capitol Hill staff member who is working on updating the compliance requirements for the BSA. Overall, we find that F&M Bank’s compliance team is satisfied with its current software, but it acknowledges that additional improvements could benefit the bank. Our discussion with a Capitol Hill staffer illuminated the fact that Capitol Hill is aware of the outdated nature of the BSA. This awareness led to Capitol Hill’s introduction of legislation aimed at improving

unique opportunity is crucial because it is a cost-efficient way to reduce costs for all the community banks in the area. 2.6 BSA Challenges and Future Outlook Proving Beneficial ownership is a significant challenge for F&M as it leaves the responsibility of proving individual and corporate identity on the team. Beneficial ownership is defined as, “a person who enjoys the benefits of ownership even though the title to some form of property is in another name” (Chen). Banks must create policies for how they will verify the identity of the corporate account holder. F&M’s policy implements I.D. checks and a series of questions to verify an individual’s identity. This process has proven to be time-consuming and inefficient as reputable customers repeatedly answer the same questions. F&M would like to see the responsibility for this shifted back over to the State Corporate Commission who previously had this responsibility.

F&M Bank is currently operating as best it can given the current guidelines and its limited set of resources.

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