Attorney General Tong Seeks Banking Reforms in Aftermath of M&T Conversion
(Hartford, CT) – Attorney General William Tong today sought new investigative authority over bank consumer financial protection failures following the fraught merger between People’s United and M&T banks. To date, the Office of the Attorney General has received over 400 complaints regarding the merger, including alarming reports of money disappearing from accounts, loss of access to online banking, and refusal to accommodate those with pre-existing power of attorney.
“Five months after the conversion, my office continues to receive complaints from individuals who cannot manage a loved-one’s money despite having the legal authority to do so under a power of attorney, because M&T curtailed their account access. When my office brought this systemic issue to M&T’s attention, they refused to address the problem broadly, opting instead to wait for customers to complain and resolve the complaints on a case-by-case basis,” Attorney General Tong states in his testimony. “Other common complaints include a sudden loss of access to online banking and debit accounts; inability to make payments or obtain records on loans transferred from People’s United to M&T; and defaulting checking customers into M&T checking account products requiring the highest minimum balance, with highest fees.”
“Several consumers reported that their automatic payments were processed as planned in the month following the conversion, but in October, M&T shifted their payment dates to the end of the month without notice, causing numerous customers to pay their bills late. These customers also reported difficulty when they tried to rectify the errors with M&T.
“Some of most common and perhaps most disturbing complaints are related to unauthorized deposits and withdrawals. Consumers complained to my office that paychecks were not deposited despite their employer transferring the money to them. Others reported that large sums of money disappeared from their accounts without explanation and they had to fight with M&T to get their own money returned,” Attorney General Tong states in his testimony.
The bill seeks new investigative authority under the federal Consumer Financial Protection Act of 2010 (CFPA), also known as title X of the Dodd-Frank Wall Street Reform Act. The bill would empower the Office of the Attorney General to enforce critical provisions of the CFPA to protect consumers, including authorizing the Attorney General to conduct investigations of alleged deceptive and anti-consumer practices. Federal authorities and other state attorneys general have used this authority to investigate and bring civil enforcement actions to hold accountable payday lenders, debt collectors, cash advance companies, for-profit colleges, tribal lending entities, and purported law firms operating mortgage relief schemes. The bill would give the Office of the Attorney General the investigatory tools necessary to enforce CFPA protections against banks chartered in other states, including M&T.
“The frustration so many elected officials heard from our constituents following the takeover of People’s United Bank by M&T Bank last fall provides a clear illustration of the regulatory gap this proposal seeks to fill,” Attorney General Tong states in his testimony.
Click here for the full testimony.
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