When banks get bigger through mergers, their compliance efforts should improve, industry experts say.

But any changes have to be made invisibly, so the only thing the customer notices is improved service.

James T. Brankin, vice president and senior compliance officer at First National Bank of Chicago, said banks should look at mergers as a chance to start fresh and bolster their compliance programs.

"It gives you a chance to start with a clean sheet," Mr. Brankin said. "The question is, How do we build the best functions and develop the best programs in the industry?"

That's what First Chicago is asking as it merges with NBD Bancorp.

But Mr. Brankin said customers should be shielded from any growing pains or transitional changes. Nothing can be allowed to fall between the cracks during the chaos caused by a merger.

"Companies must make sure that there is absolutely no interruption or relaxation by either merging partner at any point as to how we deal with our communities," Mr. Brankin said. "You can't ever do that. You've got to continue to deliver services seamlessly, without a hint of change to the customer."

Tim Marrinan, executive vice president and general counsel for Barefoot, Marrinan & Associates, said more banks seem to be paying attention to the effect mergers can have on compliance issues.

"I'm pleased to say that companies have treated compliance as they would any other unit, by trying to figure whether they have full or adequate coverage," he said.

Top compliance concerns, according to the consultant, include the Community Reinvestment Act as well as both banks' fair-lending records, Truth-in-Lending, and Truth-in-Savings.

Once the merger is consummated, more details can be addressed, determining which banks' method of officer training to use and the role of audit departments within the banks' compliance structure.

Allan Kraemer, vice president in charge of corporate compliance at BankAmerica Corp., said the period immediately following a merger is crucial. Bringing the new banks into the fold requires phasing out computer systems and retraining employees, among other time-consuming tasks.

Regulators won't let these transitional issues go unnoticed, said Wayne Barnes, a consultant with Professional Bank Services, Louisville, Ky. Thus, banks can't afford to ignore them either.

But planning how best to combine the banks' services is anything but easy, Mr. Brankin said.

"Partner A may have the best way to do something, or it might be B, or it make take some of both," Mr. Brankin said. "The real key ... is not just blending by default, not just a simple physical smudging together of people. It's not just taking what we've got and what they've got and putting them in the same room."

Spokespeople at Chase Manhattan and Chemical Bank both said it was too early to determine how their merger would affect compliance at the banks.

In some mergers, compliance personnel at the acquired bank will stay on.

"When banks get bigger, they generally need bigger compliance departments," said NationsBank senior vice president Catherine P. Bessant.

But when two huge banks combine, that may not be the case.

"When a bank buys a smaller bank, there's still going to be a need for on-site compliance," Mr. Barnes said. "But if you have two large multinational banks with 15 people in each compliance department, there's going to be some attrition factor."

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