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Our bank purchased another bank, and we are consolidating certain checking, savings and money market accounts. We are considering putting all of the checking accounts into two different types of checking accounts that we currently offer. We would provide new disclosures to all affected customers. Would we also need new signature cards for these accounts? – IBA Compliance Connection

IBA Compliance Connection

Your go to source for compliance!

Our bank purchased another bank, and we are consolidating certain checking, savings and money market accounts. We are considering putting all of the checking accounts into two different types of checking accounts that we currently offer. We would provide new disclosures to all affected customers. Would we also need new signature cards for these accounts?

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We are not aware of any law or regulation that would require you to obtain a new signature card when a customer changes from one type of deposit account to another. However, if the account terms are being changed, we believe customers should sign new signature cards and other account agreements to memorialize their acceptance of the new account terms.

The official commentary to Regulation DD provides that new account disclosures are not required “when an institution acquires an account through an acquisition of or merger with another institution” — unless any account terms are being changed that require advance notice. Consequently, if consolidating the acquired deposit accounts into new types of deposit accounts results in account terms being changed, we recommend providing new Regulation DD account disclosures.

For resources related to our guidance, please see:

  • Regulation DD, Official Interpretations, Paragraph 4(a)(1), Comment 2 (“New account disclosures need not be given when an institution acquires an account through an acquisition of or merger with another institution (but see § 1030.5(a) of this part regarding advance notice requirements if terms are changed).”)
  • Regulation DD, 12 CFR 1030.5(a)(1) (“A depository institution shall give advance notice to affected consumers of any change in a term required to be disclosed under § 1030.4(b) of this part if the change may reduce the annual percentage yield or adversely affect the consumer. The notice shall include the effective date of the change. The notice shall be mailed or delivered at least 30 calendar days before the effective date of the change.”)
  • Regulation DD, 12 CFR 1030.4(b) (“Account disclosures shall include the following, as applicable: (1) Rate information . . . (2) Compounding and crediting . . . (3) Balance information . . . (4) Fees . . . (5) Transaction limitations . . . (6) Features of time accounts . . . (7) Bonuses . . .”)