Feds lift regulatory restriction for M&T Bank after four years

Jul 28, 2017
Originally published on July 28, 2017 4:08 pm

A regulatory matter involving M&T Bank, raised four years ago amidst a major bank acquisition, was formally resolved Thursday when the Federal Reserve lifted a "letter of agreement" related to it.


At issue were M&T's anti-money-laundering and Bank Secrecy Act programs. The federal government did not accuse the Buffalo-based bank of any wrongdoing. But it raised concerns that, as M&T worked to acquire New Jersey-based Hudson City Bancorp in a multi-billion dollar deal, the Buffalo-headquartered bank's programs were insufficient for an entity of its size.

"There was no indication we were allowing people to launder money for any illicit purposes at all," said

M&T Vice Chairman Rich Gold. "Really, the focus was on whether the program had kept pace with the growth of M&T over time and whether the program was going to be adequate for the size we aspired to become."

In the government's opinion, the bank's program had deficiencies. Both sides entered into a "letter of agreement" in June 2013. M&T completed its acquisition of Hudson City Bancorp in 2015, growing the Buffalo bank into one that held, according to Gold, an estimated $100 billion in assets.

On Thursday, the Federal Reserve announced M&T had met all requirements listed in its 2013 "letter of agreement."

"What our regulators are telling us officially is that we have satisfied all of the conditions of the original written agreement and now have a program that is commensurate with our size and complexity," Gold said.

It lifts a burden on the bank and opens the path to future acquisitions but Gold pointed out that lifting the letter should not be seen as the government's blanket endorsement of any future deals.

"While a tremendously important impediment has been eliminated as of today, we still have to go through an approval process with regulators for any potential merger or acquisition that we might consider," he said.

Gold told WBFO the bank learned a lesson of not taking anything in the regulation process for granted.

The company also recently released its second quarter report, showing higher-than expected revenue that, in turn, resulted in earnings exceeding analysts' expectations.

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