Bank of America CEO Brian Moynihan has a lot of nerve. Either that, or he is profoundly disconnected from his company’s ordinary, everyday customers. My guess is both. Evidence of a major disconnect came in a recent Moynihan speech to BofA employees in which he declared himself “incensed” about all the bad things people are saying about his poor widdle bank. His company has screwed untold numbers of customers, but he’s incensed — kind of like the school bully who gets mad when the teacher rebukes him for taking other kids’ lunch money.
The criticisms are especially unfair, Moynihan told his employees, “when you think about how much good all of you do, whether it’s volunteer hours, charitable giving we do, serving clients and customers well.” There were no reports of riotous laughter after that “serving customers well” part, so we assume Moynihan was serious. In fact, we know he was serious. What other local banking bigwig (besides Moynihan’s predecessor, Ken Lewis) has ever seemed so tone-deaf to the public mood?
That institutional cluelessness, unfortunately, is no surprise. From the time of the economic meltdown in 2008, BofA has hardly made any good moves — either in terms of making money, or of public relations.
Much of the criticisms sticking in Moynihan’s craw started after the late-September notice of a $5-per-month charge for debit card users. The timing of the announcement — on the heels of brutal employment reports and growing anger over U.S. income inequality — was proof enough of BofA’s tone-deafness. It evidently never entered the head of the bank’s top execs that public anger over the debit-card news was less about the fee itself and more about it feeling like the proverbial straw that broke the camel’s back.
At first, BofA honchos reacted condescendingly to the anger, thus further polishing their “clueless” image. The bank’s defenders then claimed it was “forced into” the debit-card fee when Congress put new caps on retailers’ debit fees — as if the bank is somehow guaranteed a certain profit, no matter what. That explanation may have worked in the pre-recession era, back in the days when big banks’ reputations were still better than that of raccoons raiding a garbage can. But three years into the Great Recession? Sorry.
Moynihan nailed the Tone-Deafness prize, though, with his next explanation: Hey, if you keep a ton of money in our bank, you won’t have to pay that monthly debit-card fee. To the 1-percenters, that no doubt sounded good. To nearly everyone else, however, it was just another slap in the face from Bank of America. The uproar over debit-card charges finally led other large banks to back off their own plans to charge similar fees, and now BofA supposedly plans to make it easier to avoid the debit-card fee. Like that will help its image now.
Moynihan must be really incensed now, since his bank took even more hell last week. First, Truthout, a leading progressive news blog, ran an extensive story Thursday titled “10 Reasons Bank of America Is the Most Hated Bank in America.” It’s not a pretty picture. On Friday, some Democratic lawmakers, including N.C.’s Rep. Brad Miller — but not banker-friendly Rep. Mel Watt of Charlotte — asked regulators why they allowed BofA to transfer derivatives from Merrill Lynch into the bank’s deposit-taking operations. Since the deposits are insured by the Federal Deposit Insurance Corp., the lawmakers say taxpayers could once again be stuck paying big investment losses, just three years after BofA received tens of billions in bailout money.
So it’s not just the debit-card issue that has people moving their money into credit unions. Since Moynihan seems to have forgotten why his company’s reputation is circling the drain, here’s a short guide to help him out:
• Bank of America was part, although by no means the largest part, of the insane Wall Street gambling in derivatives that nearly brought down the global economy.
• BofA was involved, largely through its Countrywide Financial friends, in massive foreclosure fraud, including robo-signing foreclosure documents and using false documents to justify foreclosures. Those scandalous goings-on included Bank of America paying $22 million to settle charges of improperly foreclosing on active-duty troops. Nice, huh?
• The bank was bailed out by taxpayers and yes, they’ve paid it back, but continuing to act as if the rest of us saving the bank’s butt was no big deal is not exactly a way to regain trust.
• BofA consistently ranks low in customer satisfaction, small business-owner satisfaction, and was voted the nation’s second-worst company (behind BP) by Consumerist.com, a Consumer Reports-affiliated outfit. Finally …
• Bank of America has laid off more than 30,000 employees — thirty thousand!
And Brian Moynihan thinks he’s incensed? C
john.grooms@creativeloafing.com
This article appears in Nov 1-7, 2011.
The employee’s that volunteer on behalf of their company sponsored events do deserve credit. Those employee’s who try to help it’s customers to survive at a time of mortgage failures also deserve recognition. But Mr. Moynihan get real. This is such a small part of Bank of America. I have seen Bank of America for how it really is. My wife worked for you for nearly ten years. She has seen the real B of A at it’s worst. You where aware you where writing bad mortgages for over 8 years. You fast tracked everything. You made it easier to write bad loans. Your loan officers where disgusting in how they treated the underwriters, processor’s and your upper management was so out of touch with reality that everyone that worked their new it was a matter of time. She took a transfer to Charlotte about 4 years ago when the country and company was going through some real problems and YOU and B of A continued with your reckless practices. Your way of doing business as well as other banking institutions is why we are in such a crisis with all the foreclosures. You knew people could not afford the homes they where buying. Yes it’s true some blame goes to these people but you gave away trillions of dollars in bad loans Nation Wide and you wonder why you needed to be bailed out. Get real ! Lose your attitude. Be humbled by your mistakes and get back to basics. Oh yeah stop letting your HMC’s run the company. Real them in. If it’s a bad loan then let it die and stop writing so many bad loans. We personally are aware of at least 30+ employees in Charlotte and New Jersey that say it’s the same old business at B of A. Really!! You wonder why people are marching on the banking systems! You wonder why people are leaving you after trying to steal 70 dollars a year from every person with an account with you! This is a wake up call to all that do business with this type of institution. Leave them! Don’t do business with them and lastly don’t buy a home if you can’t afford it!! God have mercy on the evil souls of the clowns running Bank of America. I personally would like them to rename the Bank to anything that shows that they are not the choice of America. Just the opposite!!
I want to thank you for taking the time to tell it like it is. Bank of America is a rip off and has been for a long time. I’m a former employee. I personally saw and even typed letters for those huge bonuses and stock share gifts the head honchos got, and most of the time I got nothing. I was finally layed off, and guess what; it was a blessing. I’m glad they laid me off. They did me a favor. Thank God I got a job, which doesn’t pay quite what I was making, but at least I have some peace of mind. The BofA is a greedy institution who cares about no one! They’re like you said, the big bully who runs around kicking all the little people in the butt. Well, guess what BoA, now it’s time to get your butt kicked. It’s about time you know what it feels like!
Look up “Fee Pig” on YouTube. Bank of America is one, and the pigs name is Brian. It’s amazing at BoA’s ability to piss off customers, it’s like they look for ways to get me mad. We are down to a mortgage with them and if we could we would refinance to another company. We did not pick BoA our mortgage was sold to them and I am sorry it happened.
In addition to all you pointed out in your piece, BOA is a farce in nearly all respects. During the time it had received bailout money, the name of the October NASCAR race in Charlotte was changed to Banking 500. This year they changed it back to Bank of America 500. I can also attest to the fact that getting a mortgage through BOA is mind boggling. They have terrible procedures [require documents multiple times] and lack preofessionalism. What a screwed mortgage operation they have.
The greed began long before Moynihan and Lewis back in the 1980’s. The top tier management received huge bonuses while the secretaries who typed their contracts, communications and memos struggled to make ends meet. Their own meager annual raise barely enough to make a difference in their poverty level existence. Those secretaries answered the phones, greeted the customers and provided the friendly customer support that people received when they visited the bank. The top tier managemenmt that you are blaming now were trained by Hugh McColl. He was responsible for the gobbling up of 100s of small banks throughout the country. In Charlotte, now, he’s seen as a benefactor to charity. But ask one of the employees he put out with the trash after a merger what they think. Ask the secretaries who only had their Bank of America stock in their pension account to rely on in their retirement. Not a ranch in Texas or a business school or fancy houses and cars. Those top tier officers driving their big BMWs and Mercedes all the while never noticing their secretary’s bald tires. Things have been ugly at Bank of America long before Ken Lewis. The greed and the pride were there then too.
I really wish someone would give us lower level employees some credit. We don’t get the big bonuses nor the massive salaries that are mentioned in the media. We are the grunt workers, the peons, the goffers trying to keep a job so we can feed our families and not sit around on our butts collecting from the government. Cut us some slack! Please be specific in your attacks. Signed, Thankful for my job.
Does everybody feel better now that you got that off your chest? You took the Kool-Aid that the political class served you and you took your attention off of them…..the real problem. I challenge you to name one company or organization that doesn’t have its peons and ‘top dogs’. Get real folks, it’s called life and it really hasn’t changed much in thousands of years.
The piece was about B of A so that’s what I was talking about. If you want to now the real devil it’s the government. Fanny and Freddie really turned the housing market upside down. The NO DOC loan was a fn Joke. You put down what you made and no one even called to verify! Is there a wonder why so many people are losing their homes today. Gotta love those Balloon mortgages too. All interest no principal equals no equity. People wanted homes so badly but at what cost. The people are to blame as well but if the no check programs didn’t exist this could have never happened at all.
They didn’t lay off 30,000. That was the projection for the next three years. Get the facts straight. For those jealous of others, then focus on success and work for it. For those who look back at their lives and are just getting by and don’t like it, do something about it. This article smells of socialism.
Mr. Grooms, you are an idiot. First, grab a dictionary and learn the difference between revenue and profit. Revenue is money a company takes in selling products and services. Expenses (in this example, running all the servers, personnel, and logistics associated with giving customers the freedom and convenience of swiping a card at a cash register; all the security measures and alogorithms that go into fraud prevention; the costs associated with manufacturing and distributing the actual cards, etc.) are subtracted from revenue. When expenses exceed revenue, it’s no longer viable to offer a product or service, unless you want to call that service charity. When an arbitrary government regulation, borne by professional legislators (who are catering to lobbyists and political donors) mandates a cap on revenue that is less than the actual cost of delivering the service, a company can either (1) seek other means of increasing revenue to cover the cost of goods sold or (2) discontinue the service as it’s no longer a viable product stream. You need courses in basic microeconomics and accounting before your “journalism” smacks of any sense of credibility. And until the American public is willing to admit that every single person that provided false information on a mortgage application to fly-by-night mortgate brokers in strip malls, drank the kool-aid of reality shows built around the notions of house-flipping, and failed to hedge their own risks by maintaining savings and putting down a minimum 20% downpayment, there will be no escaping the financial malaise we’re all in. There is no boogeyman. People were daytrading houses and home values were based on irrational notions of endless exponential growth. We all learned valuable lessons. Now, let’s all instead come out of this together and pull ourselves up from our bootstraps instead of pointing fingers at our friends and neighbors.
cynical1 – You said it exactly the way it really is! God bless you for being able to see through the #OWS protestors and their greed! Thank you for being able to say it exactly the way it happened! You should run for office in 2012. The idiots in Washington and at Freddie and Fannie should be fired and sentenced to prision for 1) allowing this to happen, 2) letting it continue to divide our country and 3) playing the blame game which is what they are best at!
moogie_101 & me – Youve got it so right! I’m disgusted by all the blame. Most Americans these days are lazy and want to pass blame. I’m actually beginning to believe these OWS are thinking they’re going to get something free! Maybe a new home or groceries for a year as compensation for their time! It definately appears to be a movement led by the progressives trying to move us towards socialism!
COOL STORY BRO!!
@Me: if what you say is true then shouldn’t the banks and finance houses have ceased to offer CDOs when they knew they were going to bust? If you can’t see anything wrong with a $10bn market carrying $66bn of insurance (kind of makes it obvious that there’s more money to be made by letting the products sink without trace) then you are a dimwit of the first water. Regulation is required, it’s just a shame we don’t have a government with the cojones and integrity to properly regulate.