What to Know When Your Bank Is Bought Out So You Can Remain Satisfied

When your bank has been bought out by another or changes for whatever reason, should you always expect it to be a smooth transition? Is everything going always going to be the same? Or are you going to have to adjust to new regulations?

One of the most notable bank changes that has occurred in recent history was when Washington Mutual went bankrupt and was bought out by JPMorgan Chase. Customers of Washington Mutual had their account transferred to Chase, but with new policy changes many were unsure whether or not this would workout for them. Luckily there was no drastic change when people's bank accounts were converted to Chase, only a change of culture.

MyBankTracker reviewer, JackH, has learned the hard way that not every bank acquisition goes smoothly. JackH was disappointed with Santander after his previous bank, Sovereign Bank, was bought out. JackH originally banked with Fleet Bank, which was bought out by Sovereign Bank, and has maintained his same account for nearly 20 years. His frustration spurred from his claim that ATMs do not work properly, the out-of-network ATM fee of $3 is too expensive, that there are not enough tellers available in branch locations, and that customer service in general does not meet his standards.

"Since Santander took over, the whole company has gone down hill at a rapid pace and I need to find a new bank, quick. Not only have I been charged an unreasonable $35 insufficient fund fees on a number of occasions, when the money was already there, I was still charged $35. This has happened when direct deposit payments arrived, but they slipped in a few withdrawals just ahead of posting the deposit," JackH wrote.

Perhaps he could have been better prepared for these changes if he knew what to expect. Here's what you can anticipate if your bank is bought out or merges with another bank.

Expect policy changes

When a bank buys out another, new policies may be implemented. These include new fees for the accounts you currently have open, new regulations and fines as well as other rules you may need to follow. When your bank is bought out, you should be given a statement regarding the changes in policy. The documents can be lengthy and difficult to understand, so you may want to call customer service to speak to a representative in order to learn about all of the new policy changes. Changes can include new fees, new check clearing times and other changes that could impact your banking routine.

Consider leaving if you are not confident with the new bank

After reviewing the new terms of the agreement at your new bank you may consider changing banks. If the fees associated with maintaining your accounts or the new regulations do not please you, consider placing your money elsewhere. Consider opening an interest bearing online checking account, or taking your money to a bank that is more suitable for your lifestyle.

What if your credit card company changes?

A bank change and credit card change can provide similar frustration. Customer service may meet your expectations, and the new policies that are implemented could displease you. When a credit card company is bought out, you may experience more fees associated with maintaining the account, and a variety of other nuisances that you were not accustomed to before.

MyBankTracker user Harikris had this to share on how Bank of America's acquisition of their credit card company, MNBA, made them close their account. The user wrote, "I am pretty sure they will be hit by a class action suit any time now since they are doing a lot of 'financial engineering' to charge customers unethical fees and penalties. I just don't understand. Even their own customer service folks do not understand how their financial products work." Harikris held a credit card with MBNA since 2004, it was not until recently that the decision was made to close their account for good. The customer was frustrated with the new fees, as well as a lack of details being explained on the new policies associated with their credit card.

Policy changes to expect

Important policies that can be implemented when a credit card company is bought by another include:

• Change in annual percentage rate (interest)
• New annual fee
• Different perks (cash back amounts, point accumulation)
• Late payment fee changes

Switching credit cards is an option

Just as you would open a new bank account if your current one is bought out and you are displeased with the service, it is fine to open a new credit card to transfer your balance over to a card you can trust. Make sure to choose a credit card that fits your lifestyle and spending habits. Look into rewards, interest rates offered to you, annual fees and any other information about the card that is going satisfy you as a cardholder.

Why are banks and credit card companies bought?

Banks and credit card companies are bought for two major reasons. The first is that they are at risk for going bankrupt, therefore another financial institution buys them out to accumulate more customers and expand its presence and business potential. The second reason is to help them expand their growth in a particular region. For instance, Santander's move to purchase Sovereign has allowed the Spanish bank to expand its business operations in the United States. An acquisition can be either good, bad or neutral.

While in some cases, bank and credit card policies change, most acquisitions do not drastically change policies.

Signs that indicate your company is going to be bought

You can never be certain that your bank or credit card company is going to be bought out until it happens. Besides reading about it in the news, there are a few signs that indicate your bank or credit card company is going to be bought:

• There is a significant loss in value from your bank or credit card company.
• The bank or credit card company is under investigation for illegal practices.

Smaller financial institutions are more susceptible to being bought than larger ones. With less assets at their disposal, small banks and credit card companies cannot rebound after a loss in value.

Your best bet is to review the new policies to determine if your new bank or credit card company is going to satisfy you. Never feel obligated to remain with a company after an acquisition. You as a consumer have the power to take your business wherever you'd like. When you feel like it is time to move elsewhere, take the necessary actions to open a new bank or credit card account with an institution you trust.