Does the Notice of Transfer in Loan Servicing apply when two banks merge? Section 3500.21(d)suggests that the notice is not required in connection with mergers, but goes on to say, as long as "there is no change in the payee". I really don't consider asking a customer to start making their mortgage payments payable to the surviving bank's name a "change in the payee" since the surviving institution can certainly accept payments that happen to come in post merger made out to the nonsurviving institution. Besides, customers are being notified of the merger in one form or another if they haven't already heard about it in the news. I should note that customers will be able to continue to make their payments at the location they always have.

Any thoughts?

curious about this too...bump

I have the same question...

I really don't consider asking a customer to start making their mortgage payments payable to the surviving bank's name a "change in the payee" since the surviving institution can certainly accept payments that happen to come in post merger made out to the nonsurviving institution. Besides, customers are being notified of the merger in one form or another if they haven't already heard about it in the news.


This is my opinion on the issue.

If the payee's name is changing from ABC Bank to XYZ Bank then there is a change in the payee, regardless if XYZ Bank continues to accept checks payable to ABC Bank for a period of time after the merger.

Press releases, marketing materials and here-say of the merger do not meet the servicing transfer disclosure requirements.

we have two banks merging - ABC(surving) and XYZ(target), with the merger, a name is changing to AAA, would the customers of the ABC bank need to receive the notice as well as the target bank?

Doesn't sound like either bank is surviving and a new bank, AAA, is emerging from the merger. I would have to opine there is a change in the payee.

I agree with Dan. The Notice of Transfer of Servicing Rights does not say that if the 6 o'clock new announces the merger then you do not need the notice. JMHO.

Same scenario at our bank. Bank XYZ is buying our Bank, ABC. We'd like to send one "combined" notice (Hello and goodbye letter) to the customers affected. Both banks have agreed this works for them.

My question is this:

Whose letterhead and return address should we use? ABC (current servicer) or XYZ (new servicer). Both parties are "signing" the letter. Or is it better to use plain paper?

We don't have that many to send so the "letter" is being created in Word (making sure the required elements are present) and will mail merge in the name, address and loan number.

Never have had to do this before.

did you ever get a response to your question? I am in the same situation right now and am looking for direction.

We've been sending a combined notice. Instead of letterhead we have a word doc that we place the logo of both banks at the top and then it's "signed" by both banks. It contains the required info and we have the Equal Housing Lending logo on it.