Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, September 6, 1995 TAG: 9509060138
SECTION: BUSINESS PAGE: B8 EDITION: METRO
SOURCE: ASSOCIATED PRESS
DATELINE: NEW YORK LENGTH: Medium
Don't expect many immediate changes when a bank is bought out, say experts. But within months of a merger, consumers will get new paperwork, plastic and fees.
In the meantime, statement stuffers and other bank mailings that usually get tossed out should be scrutinized for fine print on the merger-related changes. Banks are required to notify customers in writing about changes in fees or rates.
Those mailings are customers' most important source of information on the merger, said Robert Heady, president of Bank Rate Monitor, a North Palm Beach, Fla.-based firm that tracks bank fees.
``People have a tendency to throw out all that literature from the bank,'' said Heady. ``You just can't do that anymore.''
If your bank is in a merger, you can expect to receive a notice within a week or two of the announcement. After that, you may not hear anything for months.
And don't expect customer service agents to provide information. Most don't know what services and fees will change until the merger date nears.
Bank mergers usually take six months or more to close. Merging operations, such as accounting systems, check processing departments and customer service centers, can take even longer.
But once operations are merged, customers may get new ATM and credit cards if their bank went through a name change.
If banks close branches, which often happens when institutions in the same geographic region merge, some customers may get new account numbers and have their accounts switched to a nearby branch.
Customers must be informed 30 days in advance of changes in checking or savings accounts and 90 days before their branch is closed, said Fritz Elmendorf, a spokesman for the Consumer Bankers Association, a trade group.
Credit card customers get less notice. Issuers need only inform cardholders 15 days before increasing rates or fees, said Ruth Susswein, president of Bankcard Holders of America, a McLean, Va.-based group.
Some banks let customers pay off balances on credit cards at the rate they originally agreed to, as long as they stop using the card for new charges, said Susswein.
Once the merger is consummated, customers may see loan and certificate of deposit rates change. That doesn't affect existing loans but can lead to special offers for new borrowers and savers, as banks hope to entice customers to remain with the merged institution with better rates and lower fees.
But the deals don't usually last. Federal Reserve and consumer group studies show that consumers end up paying more for services in the wake of bank mergers.
by CNB