Connecticut’s attorney general, which received hundreds of consumer complaints in connection with M&T Bank’s integration with People’s United Financial, is asking state lawmakers to expand his office’s authority to investigate out-of-state banks.
Attorney General William Tong is seeking a change in state law that would allow investigators in his office to apply more scrutiny to banks chartered in other states.
In testimony to the Connecticut General Assembly’s banking committee on Tuesday, Tong said the attorney general’s office has received over 400 complaints related to the systems conversion that followed M&T’s acquisition of People’s United.
He described consumers who were locked from accounts, who were unable to make payments or who could not obtain records on loans transferred from People’s United.
Some of the most common complaints, he said, related to reports of unauthorized deposits and withdrawals.
“The frustration so many elected officials heard from our constituents following the takeover of People’s United Bank by M&T last fall provides a clear illustration of the regulatory gap this proposal seeks to fill,” said Tong, a Democrat first elected as attorney general in 2018.
Tong said in his testimony that his office engaged with the Connecticut Bankers Association last year on similar legislation, and that those discussions resulted in certain revisions that are in the legislation now under consideration.
The Connecticut Bankers Association declined to comment Thursday on the legislation.
Buffalo, New York-based M&T is chartered in New York state. Tong said in his testimony that state attorneys general can bring actions against state-chartered banks to enforce certain provisions of the Dodd-Frank Act of 2010, but they cannot bring such actions against national banks.
An M&T spokesperson said in an email that the bank is committed to working with lawmakers and regulators to “demonstrate the value that M&T brings to its customers and communities.”
“M&T has worked with all impacted customers to resolve their issues and regain their trust,” the spokesperson said, adding that 12 complaints remain unresolved, and those were received within the last month.
M&T closed on its $7.6 billion acquisition of Bridgeport, Connecticut-based People’s United last April.
It executed a systems conversion over Labor Day weekend that drew immediate criticism from customers who were unable to access their accounts. There were also long wait times in branches and on the phone, and some automatic payments were disrupted.
“I share your customers’ outrage at the serious lack of preparation for this conversion,” Tong wrote in a letter to M&T in September.
Since then, M&T has met with the Connecticut attorney general’s office numerous times, the bank spokesperson said. The bank has waived consumer checking and savings fees, as well as late fees for consumer and mortgage loan payments, according to the bank spokesperson.
Concerns about the People’s United acquisition first arose in August 2021 when Tong wrote to M&T about the bank’s plans at the time to lay off 747 employees in Connecticut. Later, M&T committed to keeping 1,959 Connecticut-based workers, including 1,000 employees in Bridgeport.