2020 Journal of Community Bank Studies

Executive Summaries

Mississippi State University

C itizens National Bank (CNB) was founded in Meridian, MS in 1888, and has faced years of economic turmoil while remaining dependable in its communities. CNB fought hard to remain open during the Great Depression and was one of only six banks in Mississippi to immediately resume serving the public following the federally imposed “bank holiday.” CNB has grown organically through the years and has not needed mergers or acquisitions to grow and maintain its respect in its community. Today, CNB has grown to have nearly $1.5 Billion in total assets and has increased its net income by over 60% in the last five years. This case reviews how the Bank Secrecy Act of 1970 (BSA) affects community banks, and how much time, money, and resources are needed to comply with regulations. Many smaller, community banks are concerned that the Bank Secrecy Act and the Anti-Money Laundering requirements outweigh the benefits. BSA was originally intended to aid

investigations into criminal activity such as income tax evasion and money laundering. The USA Patriot Act of 2001 was passed in response to the terrorist attacks on September 11, 2001 and is primarily focused on stopping money laundering and terrorist financing. BSA and AML regulations have required banks to report any suspicious activity that may be linked to money laundering, tax evasion, or other illicit activities. Our findings suggest that although BSA/AML regulations are pricey for community banks, CNB has been able to lower the costs associated with it. By educating all employees on measures needed to stop fraud and having a top team of BSA specialists, the bank as a whole has done an excellent job finding and reporting suspicious activity. By fulfilling the needs of customers across Mississippi, CNB has gained the trust of its members and is in a position to become the top community bank in Mississippi.

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