Bank of America: Bad for America

Bank of America is spending like a drunken sailor, but not on anything that will serve as a life raft for our drowning economy.  The largest bank in the US received a whopping $25 billion in bailout funds from our government, but has invested $7 billion in an overseas bank and dropped another $10 million on DC lobbyists. 

It gets much much worse.  The company employs 247,000 workers, but won't foot the bill for their healthcare, worth an estimated $50 million that's coming out of public funds (on top of the bailout).  And since the government wrote Bank of America a $25 billion check, the company announced plans to layoff 35,000 workers over the next three years -- a record for the financial industry.  These are workers whose median salary was only about $23,000 to begin with.  Meanwhile, the company is still flying their executives around on a fleet of nine corporate jets worth over $200 million alone. 

To say nothing of Bank of America's predatory lending practices, the fact that they own Countrywide, the company responsible for the subprime crisis, or that they are dead set against federal legislation that would help mortgage borrowers avoid foreclosure.  And oh yeah, the Wall Street Journal just reported the Treasury is planning to give Bank of America billions more!

With such flagrant corporate greed, it's no wonder the SEIU is up in arms.  My only question is, why aren't the rest of us?  

In a national day of action today, the SEIU took on Bank of America at their headquarters in New York, Los Angeles, Chicago, Boston, and Charlotte.  Mac D'Alessandro, the SEIU's political director for the New England area, told me that about 100 people braved the bitter cold on Boston's Federal Street to pass out flyers to employees and passersby, who, for the first time D'Alessandro could recall, eagerly accepted them.  When the group attempted to present Bank of America with a giant STOP PAYMENT check, however, they were cordoned off by police.  "The biggest shock though," said D'Alessandro, "was that no one from corporate bothered to come down and accept the check."

Bank of America might have bounced the SEIU's novelty check today, but the SEIU certainly won't be thwarted.  Today's action was part of a much broader campaign to mobilize activists around the country and pressure Bank of America to use its bailout billions properly.  And you can join by telling Bank of America to help its workers and fix the economy or kindly give its bailout back.

 

Comments

[TheHandyman]

I was present, if not a participator, when the BOA was set on fire in Isla Vista, CA by anti-war protesters. I had just returned from a tour of duty in Viet Nam and didn't quite understand how or why people tied BOA to the Viet Nam War. I begin to find out though. The America part of the named should be stripped away because this institution is as antiAmerican as it comes. Personally, if the opportunity came again, I wouldn't just stand and watch others burn a BOA to the ground, I would most definitely help. My next post could be from one of those foriegn prisons where Obama has decided Americans can be kidnapped and sent to.

[NPA]

I'm so glad Walk-all-over-ya failed. No its the other banks turn. I've done some IT contract work for BOA in the past only because they fired and outsourced all of their IT staff here in FL.

[phoebie]

In 1987 and 1988 when attending banking school in Illinois, our instructors warned us of inevitable consolidation and retailing of the banking industry. More prophetically, several of them warned us to watch Bank of America closely as they were wary of their ethics and practices.

[formerprosecutor]

I don't have anything real thoughtful, or "legal", or in depth to say about BAC. MY comments apurely prgamtic anecdotal/ I had to go to my nearby, very small town to buy a large money order to send to catch up my son's back car payments (yea yea I am an enabler also). I haven't bought a money order in 30 years. I go into the BAC branch and they refuse to sell me a money order becuaes they only sell money orders to their own cutomers. S I ask to buy a cahiers check (those I have bought before). Nope, they only sell those to their customers also. HMMM. Baffled, I went next door to the post office and bought a money order. No problem.
Second. BAC made an unsecured loan to a family member, for 40K. This family member makes 55k a year. I am still incredulous. High interest. In addition, the family member was told the payments would be 340 a month. They forget to tell them (it was in the very small print on the second page)that there would be huge "insurance" on this loan (death and disability plus job insurance). That was another 450 a month. Of course they only came to me AFTER everything went to hell. Tony Soprano would be proud of BAC loan contracts.

[formerprosecutor]

My apologies for all the typos; typing without my glasses again; I guess going by the shape of the word isn't "good enough"

[hey0there]

Bank of America should not be allowed to screw America and then still get special perks like the usage of the H1-B Non Immigrant Visa Worker program. We need some strict rules to ensure they act fairly in their business dealings in the USA

[IndependentLass]

So, in the end, BOA has to follow through on the purchase of Merrill Lynch and, in return, the government provides the funds to cover the money pit which it has FORCED Bank of America to swallow. Of course, in this case, they’re actually purchasing shares in BOA.

As I said, a little research is all that’s asked for. As an accountholder with Bank of America for more than 36 years, I have made it my business to follow their “situation” closely since this financial mess began. I realize that the company is not perfect, but it IS very well managed, and to lump it in with the banks that have taken risks they couldn’t afford, is to miss the opportunity to recognize a company that has consistently made good decisions and accepted the responsibility for its misjudgments.

[IndependentLass]

Another point that I’d like to make is that Bank of America didn’t go back to the Treasury for more money because they wanted to. They went because they HAD to. Remember, BOA made the offer to purchase Merrill Lynch just as the financial system was starting to crack. At the time, the extent of the financial crisis had not even begun to be discovered. They didn't wait until ML had fallen apart and declared bankruptcy, so that they could purchase it for pennies on the dollar (like a few other "White Knights" in the industry I could name). No. They saw a company that was in financial trouble and that happened to have a good reputation in a sector of the financial industry that would fill out their own (wealth management) and they made a fair offer.

Of course, as usual, the offer included a “back out” clause. This clause gave BOA the option to withdraw the offer by the end of the year if they so chose. And, once the true size of the debt of ML became apparent, they did. What has not been widely reported is that when BOA decided to exercise their option, the government wouldn’t let them. Heaven forbid that Merrill Lynch should crash and burn! Particularly at the same time Citicorp was coming apart at the seams....

[IndependentLass]

A little research would bring to light a few things that people should keep in mind before they start condemning Bank of America:

BOA did NOT go to the Treasury for the initial $25 Billion - the Treasury came to them. The Treasury brought the top five banks in and TOLD them that they would each be receiving their "share" of a $125 billion bailout. Why? Because ONE of the major banks was in serious trouble and if it were individually identified, the resulting impact on the financial market would be catastrophic (In hindsight, my guess is that it was Citibank). In any case, Bank of America had just finished posting solid profits for the 3rd quarter. In other words, 4 of these five banks agreed to this "bailout" in an effort to help stabilize the crisis - not because they needed, or asked for, the money. They did it for the good of the country’s economy.

[Montanagramma]

IndependentLass - You are correct in your research. I remember the news reporting that BofA and one other bank did not want to take the original bail out money, but they were forced to. The Merrill Lynch merger is what is causing the current problem. Bof A is just getting the flack for it! I also am fully aware that perks that had earlier been earned by lower level folks were cancelled so that they would not appear to be an AIG type company. Your research is much more thorough than mine, but the conclusions are the same.

[4real]

Why don't consumers just start closing their accounts with BOA. That would send them a message.

[clevelandchick]

I did just that. BOA raised my interest rate on a credit card at time of renewal for no reason. I never once missed a payment. So I paid off the small balance and cancelled the account.

My husband just found out that the rate on his line of credit for his business is going to double, for no reason. He's had the account in good standing since it's inception 5 years ago. Of course this happened because his bank WAS National City the bank recently bought by PNC with TARP money. PNC is raising rates for what? They were given billions by the treasury to buy NC. It's just pure greed.

My advice to everyone would be to pay down as much debt as possible if it is held by one of these large banks or one that's about to be bought by a large bank. We have to stop being their bitches.

[Libarchist]

Let the banks fall.

[Chaimirija]

BOA
=

Bend Over America

Strength in numbers

Everyone Unionize

NOW

[Ljeff79]

I've been thinking lately that it is time for a NATIONAL work slowdown. All people, all industries.

[onwatch]

Outside of commenting on the B o A, This activity just shows how important it is to have healthcare not attached to employer.

[wm1066]

Why,oh why is Obama clueless on the Geitner nomination? Didn't Geitner helped BA get those billions?

[Sharon Foxworthy]

Yesterday I transfered our credit card balance of $10,000 (balance built up when my husband and I both lost our jobs) to my discover card as an act of protest. BoA was charging us over 20% interest, whereas I am getting 5.99 on my Discover.

I also cancelled the credit protection service I have had since 2000.

I am furious that our government just handed them more of our money. Traitors, everyone of them.

[jinxed]

Wouldn't it be refreshing to see the layoffs of those making over $150K first? IMHO ALL layoffs should start from the top down not the bottom up. One $150K job = 7 $20K jobs. So who do you think pays more taxes, house payments, groceries, etc. 1 $150K job or 7 $20K jobs?

Just think about it ... you could lay off 5,000 upper and middle management employees or 35,000 bottom level employees. What will impact America less, 5K or 35K unemployed?

[Chaimirija]

if enough of us go for it...