When a bank merges with another institution that was also a reporting institution, and the acquiring party does not report HELOCS and will be submitting one LAR for both bank, if the acquired institution use to report HELOC, does it need to be reported if the acquiring institution does not?

You should not change the LAR of the merged institution. You report their LAR through day of merger, HELOCs and all. Going forward, report under the new rules.

Be sure to check with HMDA Help on coding the transmittal when reporting their HMDA - there's a code added to let the Fed know that it is the last report for the institution.