Rep. Delnicki Looks to Prevent Future Bank Merger Turmoil

SOUTH WINDSOR – State Rep. Tom Delnicki (R-14) hailed the passage of bipartisan legislation to safeguard bank customers when banks merge with other banks.

“This bill is a first steps that looks to protect bank customers from future problems accessing their accounts. Many people bank with local community banks and when bigger corporate banks gobble them up, the existing customers sometimes experience interruptions in services that can cause great concern and financial worry,” said Rep. Delnicki. “We need to reassure Connecticut banking customers, especially our seniors that we have their back and will protect them.”

From being locked out of online banking, to receiving messages that their account does not exist at all, customers of the former People’s United Bank are dealing with a variety of issues since the entity was acquired by M&T Bank.

The bill Senate Bill 1033, includes an amendment which Rep. Delnicki co-introduced, which requires the Commissioner at the State Department of Banking to timely help financial institution account holders with issues related to a merger with another financial institution and post information on DOB’s website about the department’s availability to help.

The Commissioner must also receive and review complaints from account holders at a financial institution that merged with another financial institution and investigate the complaints if one of the institutions is a Connecticut bank or Connecticut credit union; review information related to complaints involving Connecticut banks and Connecticut credit unions from account holders who provide written consent to the review and help account holders who submit complaints to understand their associated rights and responsibilities; communicate complaints about a financial institution after its merger to its primary regulator if it is an out-of-state bank, out[1]of-state credit union, or a federal credit union; provide information to the public, state agencies, legislators, and others about the problems and concerns of people who submit complaints and recommend ways to resolve them; and analyze and monitor the development and implementation of laws, regulations, and policies on financial institutions and their mergers and recommend any necessary changes to them.

The bill also requires the commissioner to take any other necessary actions to fulfill these required duties. Starting by January 1, 2025, the bill requires the commissioner to annually submit a report to the Banking Committee that (1) summarizes the commissioner’s required analysis of merger laws, regulations, and policies and (2) recommends any changes to federal, state, and local laws, regulations, and policies on financial institution mergers the commissioner deems necessary.

During the public hearing phase, the Connecticut Chapter of the AARP testified in favor of a customer protections provision during bank mergers.