Mergers and acquisitions in the banking industry can reap big rewards: new customers, new product lines and an increased footprint, to name a few. But rewards often come with risk, particularly if there are unexamined or overlooked compliance challenges.
One often overlooked risk area in M&A due diligence is unclaimed property. Technology limitations, varying interpretations of state laws, multiple disparate operating systems, outdated policies and procedures and an inconsistent compliance history can leave the acquiring bank with an acquisition-induced liability. This liability can have significant long-term repercussions.
Without the appropriate due diligence prior to the acquisition, the reality of the situation may not emerge until the acquired banks’ records are converted. This can leave a newly integrated team with the daunting task of evaluating the level of exposure and developing mitigation strategies. And these tasks need to be completed while continuing to maintain current compliance efforts.
Dunbar has developed a proactive evaluation to assist financial institutions in assessing the unclaimed property risk in the acquired institution. Through this process we help financial institutions develop a strategic approach for addressing immediate compliance issues and initiate efforts to mitigate liabilities as soon as the conversion takes place.
To learn more about the proactive risk evaluation, please contact: Maureen Ferrari Grollman Dunbar’s National Practice Leader for Consulting and Reporting at 610-256-7931 or via email at email@example.com