Our HOA's bank is being bought by another bank. What does the treasurer need to do?

By OurHOA · General information · Revised November 3, 2026

When your HOA's bank is acquired or merges: check FDIC coverage under the six-month rule, protect owner and vendor payments, reset controls, and reconcile the cutover.

Part of the HOA board handbook: treasurer and money.

The short answer

The association's money is not at risk just because the bank changed hands, and nothing has to happen the day the letter arrives. The risk sits in three places. First, if the association already has money at the buying bank, the two balances will eventually count against one $250,000 FDIC limit. Second, every payment that runs on the old routing or account numbers can break on conversion weekend. Third, online banking users, dual approval and positive pay often have to be set up again on the new system, and that is when controls quietly fall away. Give the merger to the treasurer as a small project with a written checklist and a report at each board meeting until it is done. Rules on records and signers vary by state and by your governing documents. This guide is general education, not legal or financial advice.

Pull two dates out of the notice

Merger letters are long and mostly marketing. Find two dates. The legal effective date is when the selling bank stops existing as a separate insured bank, and the FDIC's six-month clock starts there. The conversion date, often months later, is when your accounts move onto the buyer's systems, and it is the date that breaks things. Ask the bank to confirm both in writing if the letter is vague. Then call your branch or business banker and ask, with notes: - Will our routing number or account numbers change, and for how long will the old ones still work for deposits and drafts? - Do our online banking users carry over, or does each person enroll again? - Do dual approval, positive pay, ACH debit blocks and alerts carry over as set, or reset to defaults? - Will our lockbox or deposit address change? - Do our current checks stay valid, and until when? - What is the new fee schedule, and when does it start? Keep the answers in the board's records. If something later goes wrong, you will want to show what the bank told you and when.

Recheck deposit insurance across both banks

The FDIC insures an association's deposits up to $250,000 per bank, no matter how many owners or signers it has. Boards that split reserves across two banks to stay under that limit can find both banks have become one. The FDIC gives a grace period for this. Under 12 CFR 330.4(b), deposits from the bank being taken over stay separately insured for six months after the merger takes effect. CDs get a slightly different rule. A CD that matures after the six months stays separately insured until it matures. A CD that matures inside the six months and is renewed for the same term and the same dollar amount stays separately insured until its first maturity after the six months. A CD renewed for a different amount or term, or not renewed at all, is separately covered only until the six months run out. A worked example. Maple Ridge HOA keeps $90,000 of operating cash and a $110,000 reserve CD at First County Bank, and a $120,000 CD at Valley Savings. Valley Savings merges into First County on March 1. Until August 31, all $320,000 is covered. After that, if nothing changes, First County holds $320,000 for one depositor and $70,000 is over the limit. Valley's CD matures in May. Renewing it for the same 12 months and the same $120,000 keeps it separately covered until next May, which gives the board a calm year to plan. Adding interest to principal at renewal changes the amount, so take the interest as a check or transfer it to operating. Our guide on investing HOA reserves in CDs and Treasury bills covers where to put the money that has to move.

Keep owner payments and vendor drafts flowing

List every payment that touches the association's account numbers before conversion, not after something bounces. On the incoming side: owners who mail checks to a lockbox, owners whose own banks send bill-pay checks or electronic payments, and the payment processor that deposits portal and autopay collections into your account. The processor needs the new routing and account numbers before the conversion date. Ask it, in writing, which date it will switch. If the lockbox address changes, keep the old one forwarding as long as the bank allows. On the outgoing side: utility and insurance autopays, the payroll service, the management or bookkeeping fee, and anything the association pays by ACH. Billers that pull money from your account need the new numbers. Payments you push through the bank's bill pay may need to be set up again on the new platform. Check each one off only after the first payment clears on the new system. A short owner note is enough, because owners do not need to do anything unless they pay by bill pay or mail: 'Valley Savings is now part of First County Bank. Your dues, due date and payment portal are not changing. If you mail checks, use the address on your next statement. If your own bank sends your payment, check that it shows Maple Ridge HOA and the address on your statement. The HOA will never ask you to send dues to a new account by email or text alone.'

Rebuild controls on the new system

Conversion is when a careful setup turns into one person with full access. If users enroll again, enroll at least two people, each with their own login. Then turn on dual approval for transfers, ACH and wires, account alerts, and positive pay before the first payment goes out. If you use positive pay, upload the list of checks still outstanding from the old system so the bank does not reject good checks. Make sure the signature card and online users match the current board, not the board from three years ago. If the bank asks for a new resolution, use a plain motion: 'Move that the president, treasurer and secretary be authorized signers on all Maple Ridge HOA accounts at First County Bank, that two approvals be required for any payment over $2,500, and that the treasurer complete the account conversion and report to the board at the next meeting.' Mergers bring phishing. Fraudsters send fake 'verify your account for the conversion' emails and calls. Tell every director and your manager that no one gives a login, code or account number to anyone who calls them. Call the bank back at the number on a statement. Our guide on protecting HOA bank accounts from fraud lists the settings worth turning on.

Reconcile the cutover month

The conversion month often produces two statements for one account: a final one from the old system and a first one from the new. Reconcile both, and confirm the closing balance of the first equals the opening balance of the second. Watch for interest posted on a different day than usual, fees charged under the new schedule, and old-series checks that clear on the new system. In the accounting file, keep the same bank account in the general ledger and update the account number and name in its description. Opening a new ledger account for what is legally the same deposit splits the history and confuses the next auditor or CPA. Before old online banking goes dark, download every statement and check image the association still has to keep. Texas Property Code section 209.005(m) requires associations with more than 14 lots to keep financial books and records for seven years. Florida section 720.303(4) lists financial and accounting records, including itemized receipts and expenditures, among the official records kept for at least 7 years. Colorado section 38-33.3-317(1)(a) requires detailed records of receipts and expenditures. The bank's new system may only show history from the conversion date forward.

Decide whether to stay

A merger is a fair time to ask whether the bank still fits. Compare the new fee schedule, minimum balance rules, whether a local person still answers the phone, and whether the bank still offers the services you use, such as positive pay or a lockbox. If it does not fit, our guide on moving HOA accounts to a new bank walks through a planned switch. Do not move money in a hurry during conversion week, though. Finish the conversion, reconcile, then decide at a regular meeting.

A sample timeline

Day the notice arrives: treasurer notes the effective and conversion dates and puts the six-month date on the board calendar. Week 1: call the bank with the question list; total balances at both banks if the association uses both. 30 days before conversion: send new numbers to the payment processor and billers; send the owner note; download all statements and check images. Conversion weekend: do not schedule payments that weekend; log in Monday and confirm balances. First two weeks after: re-enroll users, turn on dual approval, alerts and positive pay; confirm each autopay and the first processor deposit. Month-end: reconcile both statements and report to the board. Before the six-month mark: move any amount over $250,000 or renew CDs on the same terms. The mistakes that cost boards money are rolling CD interest into principal and losing the extended coverage, leaving a former director as an online user, letting one person complete the new enrollment alone, and assuming the processor switched the deposit account without checking.

Sources

These guides are general education for HOA boards and residents, not legal, tax, or financial advice. Rules vary by state and by your community's governing documents - check with a professional for your situation.

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