Dive Brief:

• M&T Bank will compensate former People’s United Bank customers for financial troubles encountered when their accounts were converted to a new computer system over the Labor Day weekend, including late fees incurred on bills when they couldn’t access their funds, M&T CEO Rene Jones told senators in a letter last week.
• Sens. Richard Blumenthal, D-CT; Elizabeth Warren, D-MA; Bernie Sanders, I-VT; Patrick Leahy, D-VT; and Ed Markey, D-MA, voiced their concerns days earlier regarding the conversion that accompanied the banks’ $7.6 billion merger.
• “M&T Bank’s commitment to compensate customers who were adversely impacted by the conversion — whether missing payments or denied access to their money — is a welcome step toward making things right,” the senators said in response Thursday, adding that they “will continue monitoring the situation to make sure M&T follows through with their promises. Consumers need swift relief and remedy now for the hardships and stress the conversion failures caused.”

Dive Insight:

M&T’s pledge to make harmed customers whole came during a week when the bank disclosed to Connecticut Attorney General William Tong that it laid off 325 People’s United employees, with plans to cut 333 more, according to CTInsider. The bank had initially targeted 747 Connecticut jobs as a result of the merger. M&T said, however, that it plans to hire for about 350 other jobs.

Jones, addressing the senators, wrote that the bank’s commitment to its customers includes “owning up to our mistakes, working diligently to remedy them, and taking actions to protect our customers against loss or other harm.”

Through the end of October, M&T is waiving consumer checking and savings fees and is not assessing late fees for consumer and mortgage loan payments, Jones said, adding that front-line branch and call-center employees have been authorized to waive other fees as appropriate.

“For customers who were unable to access funds during the conversion, we will provide appropriate financial remuneration,” Jones wrote. “We have already begun to reimburse customers who incurred fees as a result of late credit card, utility and other payments."

Of the 1 million former People’s United customers and their 1.7 million accounts affected by the conversion, 0.6% made complaints to M&T about accessing their accounts, Jones wrote, but added there are likely others who didn’t formally complain.

As CEO, Jones said, “I take full responsibility and apologize to our customers who experienced delays and disruptions or whose expectations were not met.” 

Tong, too, blasted M&T last month for what he called a “serious lack of preparation” following reports that some customers were left unable to access their online accounts as a result of the transition.

“Should Connecticut consumers continue to experience extended gaps in customer service, my office will not hesitate to use the full extent of our authority to protect families and businesses,” Tong wrote in a letter to Michael Keegan, M&T’s executive vice president and head of community markets, on Sept. 14.

Jones’ letter to senators on Sept. 26 assured them that in the first week post-conversion, the bank “immediately address[ed] customer concerns as soon as [it was] made aware of them, extend[ed] its call center hours, and dedicat[ed] additional staff to branches requiring support.”

“We continue to proactively reach out to affected customers via phone and email if and when we suspect they may be having issues as a result of the conversion,” he wrote.