We are not aware of any requirement to notify your federal regulators when you sell a branch to another financial institution, provided that the branch will not be closed. We are also not aware of any Illinois law that addresses a branch closing. Of course, it is likely a prudent practice to notify any branch customers that the branch location will no longer be operated by your institution.

The Federal Deposit Insurance Act requires an insured depository institution to notify the appropriate Federal banking agency and to notify their customers prior to closing a branch. 12 USC 1831r-1. However, as the federal agencies’ Joint Policy Statement makes clear, the law does not apply to “mergers, consolidations, or other acquisitions, including branch sales, that do not result in any branch closings.” See Joint Policy Statement on Branch Closing Notices and Policies (June 29, 1999). We also discussed the application of the law with the FDIC Regional Counsel for the Chicago Region, who confirmed that the notification requirement would not apply when selling a branch to another financial institution.

We are also not aware of any requirement to notify your customers of the branch closing. However, we suggest that you check your account agreements to ensure that they do not contain any notification requirements. In addition, it may be prudent to advise branch customers that their branch has been sold to another financial institution and to provide addresses of nearby branches that may serve those customers.

Finally, we note that if you have any safety deposit boxes at the branch, you should check your agreements to determine when you should provide notice to the customer that the box will be closed or moved. Although we are not aware of any Illinois laws requiring customer notifications when moving safety deposit boxes, it may be advisable to notify your safety deposit box customers of the move.