As thousands of disgruntled customers switch from large banks to credit unions, it’s worth revisiting exactly why Bank of America and others find themselves in such a situation. Jim Hightower writes in his new column, “Bank Of America: Always Thinking Of You”:
One way you can tell that a bank is in trouble is that it suddenly starts buying full-page ads in newspapers across the country that tell us what great shape it’s in and what a fine job it’s doing for our communities.
Such a PR push is now being made by Bank of America, which — despite its happy-face ads — is in a heap of hurt. How big of a heap? So big that it’s trying to share the hurt with you and me.
In the 2007-2008 Wall Street collapse, B of A took advantage of the crisis to bulk up its empire. Using $45 billion in bailout money from us taxpayers, the giant gobbled up two troubled financial powers, investment house Merrill Lynch and mortgage hustler Countrywide Financial. It is now choking on these mergers, as well as on its own executive incompetence. Its credit rating has been downgraded, its stock price has plummeted, its CEO is desperately trying to raise cash (and save his job) by firing 36,000 employees, and it managed to infuriate its own customers by trying to impose a $5 monthly fee on debit card users.
Now, though, CEO Brian Moynihan has a dandy plan to lighten his load by dumping a big chunk of it on the backs of us taxpayers. He’s trying to transfer a mess of bad investments from his Merrill Lynch subsidiary into B of A’s consumer banking unit. Why? Because that unit has about a trillion dollars in customer deposits that are insured by Uncle Sam. So, if Merrill’s sorry investments cause the banking unit to fail, the feds would be there to rescue it.