Special Allowance for Institutions Recently Merged

The allowance is that merged institutions may consider themselves to be separate institutions for Regulation CC purposes for up to one year following the consummation of the merger transaction. [12 CFR 229.19(g)(1)] This allowance primarily affects whether an ATM is proprietary or nonproprietary and when a check is considered drawn on a branch of the depositary bank. The allowance has two qualifications, however: first, a deposit in any branch of the merged institution is considered deposited in the bank for purposes of the availability schedules and the rules concerning when a deposit is made. [12 CFR 229.19(g)(1)] The second qualification is illustrated by the following example: John Doe has for many years held a transaction account at Bank A. Suppose Bank A and Bank B merge and call the new institution Bank B. Within one year after the merger, John comes into Bank B to open a new transaction account. Bank B may not consider John a new customer for purposes of applying the new account safeguard exception. The Commentary phrases this qualification as follows:

…a customer of any bank that is a party to the [merger] transaction that has an established account with that bank may not be treated as a new account holder for any other party to the [merger] transaction for purposes of the new account exception….[Commentary, §229.19(g)-1]