M&T Bank entered into a $5.2 billion merger agreement with Hudson City Bancorp (HCBK) in August 2012. The deal has been in limbo since April when the Federal Reserve Board raised concerns about M&T's procedures and processes relating to compliance with the Bank Secrecy Act and anti-money laundering compliance program.
M&T entered a consent order with the Fed in June that laid out obligations for the company to come into compliance with the BSA/AML regulations, including submitting plans for revised programs.
On its earnings call Thursday, M&T chief financial officer Rene Jones said, "We believe the progress to date has been considerable. And while we have a lot of work left to do, we continue to work diligently to create a high quality BSA compliance program that fully addresses the concerns raised in the written agreement with the Federal Reserve."
Jones said that the level of staffing needed for the BSA compliance program will eventually level out, although it is expected to remain elevated for several more quarters. He said, when asked by an analyst, that the bank didn't know what percentage of the program was completed. According to the CFO, the process involved building state of the art practices, rather than simply fixing a weakness in the system, because those trying to get around the bank's protections are also improving their efforts. The real goals is to have the board and its regulators confident in the bank's infrastructure - and he couldn't answer what the time frame for that would be.