IBA Compliance Connection

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We are updating our branch closing policy and have several questions. Is it correct that notifying the IDFPR of a branch closing is a courtesy, not a requirement? Also, do we have to receive permission from our primary regulator to close a branch? Or do we simply have to provide them with notice? If we do notify our primary regulator of a branch closing, will the notice be made public? Finally, can you confirm whether we are required to publish notice in the newspaper or merely to notify our customers in writing?

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You are correct that there is no statutory requirement to notify the IDFPR when you close a branch. You are also correct that you must notify — but not obtain permission from — your primary federal regulator prior to closing a branch. Your notice will not be made public, but the fact that you have closed a branch will be publicized. The FDIC lists bank structure changes, such as branch closings, on its website. However, this information generally does not become public until the branch has actually closed.

We are not aware of any requirement to publicize your branch closing in a newspaper, but you must notify customers of the proposed closing, both by posting a notice at the branch proposed for closure and by mailing a notice of the closure to affected consumers. The notice provided on the branch premises must be posted in a conspicuous manner at least thirty days before the proposed closing. The mailed notice must be provided to customers at least ninety days before the proposed closing.

We also suggest that you check your account agreements to ensure that they do not contain any additional customer notification requirements.

For resources related to our guidance, please see:

  • 12 USC 1831r-1(a)(1) (“An insured depository institution which proposes to close any branch shall submit a notice of the proposed closing to the appropriate Federal banking agency not later than the first day of the 90-day period ending on the date proposed for the closing.”)
  • 12 USC 1831r-1(b)(1) (“An insured depository institution which proposes to close a branch shall provide notice of the proposed closing to its customers” that “shall consist of— posting of a notice in a conspicuous manner on the premises of the branch proposed to be closed during not less than the 30-day period ending on the date proposed for that closing; and . . . inclusion of a notice in . . . at least one of any regular account statements mailed to customers of the branch proposed to be closed, or . . . in a separate mailing, by not later than the beginning of the 90-day period ending on the date proposed for that closing.”)