Tong Seeks Power to Prevent Another M&T Merger Debacle, Protect Consumers
/The aftershocks from the debacle that was the transition of the merger between People’s United and M&T Bank continue to be felt, now at the state legislature.
Attorney General William Tong is seeking legislative approval for new investigative authority over bank consumer financial protection failures, noting that while the apparently unprecedented volume of consumer complaints that cascaded on his office have slowed, they haven’t stopped, five months after the bumpy conversion to one institution.
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, Tong indicated.
“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,” Tong told legislators this week. “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.”
“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,” Tong pointed out, citing numerous examples of consumers caught up in the merger transition.
“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,” Tong explained.
“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 stated in testimony shared with legislators.
The legislation that Tong is advocating 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, according to the Attorney General’s Office. The bill would give the Office the investigatory tools necessary to enforce CFPA protections against banks chartered in other states, including M&T.
Last September, weeks after M&T merged bank systems, Tong issued a letter to M&T Bank expressing concern and seeking information regarding numerous complaints from consumers and employees following the conversion from People’s United Bank. M&T then agreed to provide daily updates to the Attorney General, including specifics on how account holders who have complained to his office are getting their troubles resolved.