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A Federal Reserve decision is expected soon on M&T's long-delayed application to buy Hudson City Bancorp. M&T would still get strategic benefits it sought, but Hudson City has shrunk and become less profitable since it agreed to sell three years ago, and the cost of the deal has risen.
September 16 -
Officials signaled that Hudson City Savings Bank's nearly $33 million settlement over redlining charges is only the first in what is likely to be a string of other cases.
September 24
The Federal Reserve Board has approved the merger of M&T Bank in Buffalo, N.Y., and Hudson City Bancorp in Paramus, N.J., after more than three years of delay.
The approval came on Wednesday, the day the regulator had set as a deadline to announce its verdict on the deal. The two companies now have until Oct. 31 to complete it.
The deal was first announced in August of 2012 but was repeatedly delayed while both companies dealt with compliance issues. The $97 billion-asset M&T was ordered to fix its anti-money-laundering controls; and the $35 billion-asset Hudson City dealt with accusations of discriminatory lending, which it
While it approved the merger, the Federal said that it does not plan to let other bank deals to remain in limbo while regulatory issues get sorted out.
"M&T's issues largely arose during processing of this application, and the Board took the highly unusual step of permitting the case to pend while M&T addressed its weaknesses. The Board does not expect to take such action in future cases," the order stated. "Rather, in the future, if issues arise during processing of an application, the Board expects that a banking organization will withdraw its application pending resolution of any supervisory concerns."
In approving the merger, the Federal Reserve said the deal would not create too much concentration risk in the banking system or impede competition among banks. The acquisition would give M&T a beachhead in New Jersey and additional diversification into consumer lending.
The price of the deal will be approximately $5.5 billion, according to each company's latest quarterly earnings reports.
