‘Still very much… a work in progress’
State legislative panel OKs bank oversight bill, but has questions for attorney general, banking department
HARTFORD — The state General Assembly’s Banking Committee approved Tuesday a bill that would strengthen the state attorney general’s ability to investigate banks, but some members expressed a desire for more clarity about the lines of authority between that agency and the state Department of Banking.
House Bill 6681 would allow the Attorney General’s Office to conduct investigations of allegedly deceptive and anti-consumer practices to determine whether there have been violations of the federal Consumer Financial Protection Act.
In addition, the legislation would provide the Attorney General’s Office the investigatory power to enforce certain CFPA protections against banks chartered in other states, such as Buffalo, N.Y.headquartered M&T, the focus of more than 400 complaints submitted to the office since the conversion last September of People’s United Bank accounts to M&T accounts.
“This bill is still very much … a work in progress,” state Rep. Jason Doucette, D-Manchester, the committee’s House chairman, said during the panel’s meeting Tuesday. “I do know that the Department of Banking is in active discussions with the AG’s office about this bill. I would expect to see some of those concerns addressed moving forward.”
Doucette added that
federal law — particularly the 2010 Dodd-Frank Wall Street Reform Act, which includes the CFPA — “specifically authorizes attorneys general to promulgate these sorts of powers. We have only done so to a certain extent, and perhaps not to the extent that other states have exercised those rights. So that’s what this is getting at here.”
Similarly, state Rep. Farley Santos, D-Danbury, one of the committee’s vice chairpersons, said, “I will vote to push this forward, but I do think that there should be a little more collaboration between the attorney general and the banking department.”
Doucette, Santos and six others voted to approve
the bill, while four members voted against the measure.
“I think this bill certainly needs a little more work, and we need to allow for the commissioner of banking and the attorney general to finish their discussions and come to a good compromise,” said state Sen. Eric Berthel, RWatertown, the committee’s ranking Senate member, who cast a ‘no’ vote.
State Rep. Tom Delnicki, R-South Windsor, the committee’s ranking House member, has criticized M&T’s handling of the account conversions. But he voted against the bill, as he voiced doubts about whether it would deliver the accountability that he was seeking.
“I do not think that M&T should have been let off the hook, though. There should have been a public hearing, there should have been some sort of clearing the air,” Delnicki said. “The more I thought about the DoddFrank bill and the more I thought about M&T, that’s probably not the best cause-and-effect. Like the good senator (Berthel), I’m going to pause and vote ‘no’ today to see what can come forward from the banking commissioner and the attorney general — just so that we would have, for sure, that kind of purview over something that happened here back last September.”
Some of those who submitted testimony about the bill, including the Connecticut Bankers Association, have also expressed concerns about it possibly complicating the respective enforcement powers of the attorney general’s office and the banking department.
Officials in those two agencies indicated Tuesday that they had been holding talks about the bill.
“Today’s vote was an important win for banking consumers statewide. It’s evident from the continuing complaints regarding M&T’s mishandled conversion that we need stronger protections,” Connecticut Attorney General William Tong said in a written statement. “We work closely with the Department of Banking every day to protect banking consumers, including regarding the drafting of
this bill.”
Matthew Smith, a spokesman for the banking department, said in an email that, “discussions have been open and ongoing. We are confident that we will be able to strike a balance between expanding the attorney general’s subpoena powers while preserving the commissioner’s authority over those entities subject to his jurisdiction.”
During a public hearing of the committee last Thursday, Tong outlined his reasoning for the bill. Much of his testimony focused on the problems experienced by M&T customers since the account conversions.
M&T officials have not disputed the assertions by Tong and other elected officials that many customers initially experienced difficulties accessing their accounts following the system changes. But they said that the company has tackled those problems and that it is providing satisfactory
service to its more than 600,000 customers in Connecticut.
“The attorney general is misinformed about the current status of M&T’s customer service. The reality is that M&T customer service phone lines and traffic in branches returned to historically normal levels months ago,” M&T said in a statement last week. “We are confident in our actions to make things right for our customers and continue to do so each and every day.”
M&T officials said that the company is not taking a position at this time on HB 6681.
Having advanced out of the Banking Committee, the next steps for HB 6681 are to-be-scheduled votes by the full state House and state Senate. The last day of this year’s General Assembly session is June 7.