Bloomberg News reported today that Bank of America CEO Brian Moynihan is rather upset by all the bad things people are saying about his bank: "I, like you, get a little incensed 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," Moynihan told employees during a global town hall meeting broadcasted from the bank's headquarters.
"You ought to think a little about that before you start yelling at us," he scolded the banks' critics.
Excuse me, but we're supposed to feel sorry for a man who earned $10 million last year while taking the homes of tens of thousands of American families and watching his own company teeter toward financial collapse.
For three years, faith, community and civil rights organizations have pushed Bank of America to stop mass foreclosures and help get the U.S. housing market working again. Instead the bank has consistently chosen Public Relations over substance, believing it is big enough to bully its way out of responsibility for the mess it created.
The Bloomberg article outlines Bank of America's strategy to deal with the increasing criticism: launch a multi-million dollar campaign to go on the offensive at the local and state level, to kick up as much fear as possible from public officials that the bank will cut them off dry if they say anything negative about the bank's impact on their communities. And lots of feel-good, full-page ads in local newspapers.
Rather than actually change its practices in order to help ordinary Americans, the bank has chosen to double-down on advertising in an effort to fight back reality.
No doubt, we will now see the bank dig up all sorts of carefully-chosen statistics about how much it is helping local communities and plaster these on every wall across every town in America. Amidst this PR blitz, we need to keep in mind some simple statistics of our own:
Fact #1: Bank of America continues to smother job creation by refusing to lend to small-businesses:
Bank of America went from being one of the top SBA lenders in 2006, making $415 million in loans to small businesses, to extending just $46 million in loans in 2010, an 89 percent drop. No wonder that Bloomberg reported that Bank of America ranked lowest in a 24-bank survey of small business customer satisfaction.
Fact #2: Bank of America continues to prefer to kick homeowners out of their homes than do permanent, sustainable loan modifications:
After participating in the HAMP program for two-and-a-half years, Bank of America has made permanent loan modifications to just 136,195 families. Meanwhile, they've denied or canceled modification for 683,000 families. This means homeowners have a one out of six chance of getting a permanent HAMP modification with Bank of America. In August 2011, the bank granted HAMP trial modifications to just 1% of eligible borrowers, according to a monthly report from the U.S. Treasury.
Fact #3: Bank of America -- and to be fair, the other big banks too -- is actually increasing homeowner indebtedness, not reducing it:
A report by the Congressional Oversight Panel last December found that nearly 95 percent of active, permanent loan modifications resulted in homeowners actually having a higher unpaid principal balance than before the modification. Translation: even those lucky few who manage to get a mortgage modification from Bank of America still end up deeper in debt than when they started. Keep this in mind every time you hear Bank of America or any other big bank tout big numbers of homeowners they have helped -- 95 percent of them are deeper in debt than when they started.
Fact #4: Bank of America continues to be a major threat to American taxpayers:
And the threat just grew by trillions of dollars. Last week, federal bank regulators allowed Bank of America to transfer the riskiest of its crumbling assets from an uninsured Merrill Lynch division to the deposit-insured and discount-window-eligible Bancorp division. As Simon Johnson from MIT wrote, "The move puts the Federal Deposit Insurance Corp. on the hook for any losses...because the agency can tap a U.S. Treasury line of credit if the fund runs dry, taxpayers could be at risk, too." This is an unacceptable shift of Wall Street risk onto the American taxpayers, and some are saying the beginning of another backdoor bailout for Bank of America.
No amount of volunteering or advertising is going to make up for the devastation done by these four simple facts.
That is why religious congregations that are part of PICO National Network are joining up with efforts to like Move Your Money to move hundreds of millions of dollars out of big banks like Bank of America and into more responsible local financial institutions. And with New Bottom Line, we're helping move Responsible Banking laws in more than fifty cities, including a campaign by LA Voice and other grassroots groups to pass a path-breaking ordinance in Los Angeles that would move city dollars into responsible banks based on their foreclosure and lending practices.
We'll keep at it until Bank of America takes the millions it is spending on its PR campaign and instead invests in meaningful assistance for everyday struggling Americans. It might just have the desired effect that Moynihan is looking for.
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