If the banking industry had a “biggest losers” award, Bank of America Corp. (B of A) would win – and that’s not a good thing.
B of A comes by its image problem honestly, and this may be the only way that “honesty” and “Bank of America” can be paired in a sentence without prompting laughter from bystanders.
The company’s sins have been widely reported. B of A essentially crafts laws, much to the chagrin of its customers and taxpayers in general, that are protected in court by well-funded trial lawyers and enforced by the politicians they help keep in office.
The B of A recently received some wrist-slaps from a sluggish U.S. Justice Department over the Fannie Mae and Freddie Mac loan “hustle” more than five years ago. That will bring little comfort to the masses of Americans who were defrauded during the nightmarish loan modification scam of 2011. In the five years between those scams, Bank of America received nearly $100 billion from taxpayers – an act of government largesse without precedent.
B of A’s newest song-and-dance is to pay out billions of dollars for offenses it says it didn’t commit to compensate for bank fraud it claims never happened. Last March, Rolling Stone’s Matt Taibbi called Bank of America “an unaccountable corporate villain.” American taxpayers were told they needed to save the unscrupulous bank because it was – you know the line – too big to fail.
Last year, the satirical website www.bank-of-you.com launched a mock Bank of America truth/apology campaign explaining facetiously why the big bank is bankrupt. “Our bank faces over a dozen class-action suits alleging improper foreclosure on thousands of homeowners …” The subtle satire continued, “We have also been accused of deliberately slowing down mortgage modification claims to avoid having to comply with programs to aid distressed families, requirements imposed on us as one of the largest recipients of 2008 bailout funds.” It’s no wonder Dow Jones was fooled into posting the site’s mock story for several hours; it’s the truth.
With its reputation sullied and its stocks sinking, one would think Bank of America’s survival plan might include courting new customers and reassuring its longtime clients. However, as thousands of B of A accountholders attest, the bank is either exasperatingly out of touch or downright aggressive with its own clients in good standing. Methods employed by the Bank when dealing with customers include repeatedly misplacing sensitive financial documents, “robo-signing” foreclosure documents without proper review, or simply not answering the phone.
One business customer, Galaxy Gaming, a Las Vegas-based company, is involved in a dispute with B of A and asked for some old-fashioned face-to-face dialogue with its financial partner. After receiving the runaround, a lot of legalese, and the cold shoulder, Galaxy resorted to taking out ad space in the Charlotte Observer last month to get the attention of the bank, which is headquartered in Charlotte, North Carolina. Galaxy’s CEO wrote an open letter to Bank of America’s CEO pleading to open the lines of communication and avoid what the bank so often does – litigate.
The letter pointed out that B of A has as much as $27 billion in its coffers for litigation purposes, and that the bank’s CEO Brian Moynihan is not a banker or financial expert, but a lifetime career corporate litigator. Albeit cheeky, the letter’s core rationale has value beyond being a mere publicity stunt. It taps into the frustration that many B of A customers have when they begin to suspect they are being fleeced and have no recourse outside of a costly courtroom battle.
Thanks to the financial bubble B of A helped to create, many businesses are struggling to survive in an increasingly regulated environment. Is this how a financial institution bearing our country’s name should be treating good Americans? Bank of America seems to be adding insult to injury.
The bank that was once too big to fail is now too big to care. The lesson is simple: Be aware of the losers whose pockets you line with money or you just might lose your shirt – and without so much as a courtesy call.
Interesting perspective. What say you all?