Merger of Clearing Houses Creates Powerhouse ACH

Two of the nation's largest regional automated clearing houses will now be part of the same company with the merger of parent payments clearing houses based in New York and Chicago. The Clearing House in New York (formerly the New York Clearing House) and the Chicago Clearing House Association announced their agreement to merge into one company called the Clearing House. The combination, which will create a check clearing and settlement company accounting for $10.3 billion in volume daily for 245 banks in the Midwest and Northeast, is expected to be completed by Jan. 1. The affiliated ACH associations–the Midwest ACH in Chicago and the Electronic Payments Network based in Weehauken, N.J.–will combine as a result of the merger into the nation's second largest regional ACH. The merger reduces the roster of regional ACHs from 20 to 19. The Midwest ACH serves 380 financial institutions in northern Illinois and northwest Indiana. EPN serves 1,225 institutions around the country and is part of the Clearing House's Small Value Payments Co. (SVPCo), New York, which also offers electronic check presentment and check-imaging services. Both parties to the merger point to operating efficiencies, particularly with respect to the movement toward electronic payment processing on a wider geographic scale, as the catalyst for the decision to merge.