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A Compliance Walk Down the Path of Mergers and Acquisitions

By Cindy LeBlanc, CRCM 19 Apr 2018

Walking the path through a merger or acquisition? Consider this...


With the beautiful sunshine and mild temperatures in my area last Saturday, it was a perfect day to hike the trails around the lake. Of course, I had to take a look at my surroundings and ensure I didn't forget anything needed to have a successful walk - my tennis shoes (flip flops won't do on a long walk); my water bottle (have to keep hydrated); and, of course my walking partner, Shelby (my German Shepherd) along with her leash, water bottle and "doggie bags". Now, I must confess, when Shelby goes on a walk with me, we don't always stay focused on the trail - there are too many other distractions which cause us to wander off the path before we get to the end.


Since we are talking about walking trails, let's take a look at the items an institution considers once they have started walking down the path of a merger or acquisition. Safety and soundness matters are usually the first thing you think of when considering the walk through a merger or acquisition. However, your institution will have to address not only safety and soundness, but also Compliance matters. Safety and soundness is not on the agenda today, so let's take a walk through some of the various Compliance tasks that should be addressed to keep your institution from wandering off the Compliance path of a successful merger or acquisition.

  • CRA - Update the public file and branch notice. Also review the assessment area to determine if changes are needed due to the merger or acquisition. Determine data collection and reporting responsibilities of the merging institutions.
  • HMDA - Determine reporting responsibility for the calendar year of the merger.
  • NMLS Numbers - Ensure the NMLS data base is properly updated.
  • Credit Card Applications - Update information as applicable.
  • FDIC coverage information should be considered and addressed.
  • Lobby Signage
  • ATM Signage
  • BSA - Consider any remote ATMS, review and update CTR exemptions, CDD, risk rating of accounts, Update Risk Assessment, and review MSBs
  • Regulation E - Consider the A-9 Opt In notice for ATM and one time POS transaction fees. Provide an Overdraft Disclosure if you offer an automated overdraft program. Send a change in terms notice (21-day advance) if you are providing different services that have not been disclosed previously or if there are changes to limitations to EFTs, or additional fees for EFTs.  If you provide a list of ATMs, that list must be updated.
  • Regulation CC - Funds Availability 12 CFR 229.19(g) allows banks to be considered separate for up to 1 year with exceptions. Review this section for those exceptions that are applicable to your institution.
  • Regulation DD - While new TISA's are not required, you are required to provide a 30-day advance change in terms notice in the event you are making changes to any of the items that must be listed on the TISA that adversely affect the customer or reduce the APY.
  • Privacy Policy - ensure you provide an updated Privacy Policy to those accounts being acquired.
  • Regulation O - if your asset size has changed, the legal lending limits will change.
  • Conforming payment notices should be updated if applicable.
  • Credit Dispute address must be updated if applicable.
  • Flood - Ensure you have notified FEMA or its agent of the change in any servicer. This is discussed in Q&A #50 of the 2009 Interagency Flood Q&As.

Hopefully you will have a clearer trail to walk after reviewing this list and you won't wander too far off the path. Happy trails!

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