Posts Tagged: BofA

BofA shifts derivative risk. Evil, good or neither? Discuss.

This started on Twitter as a discussion1 between @rootless_e and myself over this post. Then this one by Mike Lux went up a few minutes ago. Rootless observed that the first post was not complete in how the scenario plays out. The second post leaves room to wonder.

DesertBeacon wrote on this a few days ago in the context of financialization, and how it’s stifling the economy, simply because we’re shifting from a market economy to a financial economy.

Perhaps now the average American victim of the credit meltdown, whose tax dollars were used to guarantee the solvency of the American bankers, are tired of being scapegoats?  Members of the financial sector, whose avarice engendered the over-heated housing bubble, cry “Irresponsible Borrowers, Mortgage Twins, Community Reinvestment Act” in a manner analogous to the practice of putting one’s fingers in one’s ears and repeating “La, La, La, La I Can’t Hear You.”  {stage directions: “door slams, sound of car leaving driveway}

“Mother said you were shiftless.”  There’s nothing a disreputable person loves more than to remain unsupervised.   Likewise, there is nothing an ethically challenged group loves more than deregulation.   Why else would banks revise their charters to place themselves under the eyes of those government agencies most willing to look the other way?  [DB] [NRP] [TBS] And yet the banking corporations and their supporters continue to prescribe deregulation as the way to protect American taxpayers, account holders, and consumers.

Before Congressional investigators the Wall Street barons proclaimed their patriotism and devotion to American “ethics and values,” back in their corporate offices they reinforced the notion that any “market” was ethical as long as there were two willing partners to the transaction — even if one was being sold a pig in a poke — even if the investment bank was betting against its own deal. [Bloomberg] [NYT]   Brooksley Born, former head of the CFTC tried to warn us about the deregulation of credit default swaps before most people had even heard the term, she was rewarded for her prescience by being replaced, and later labeled a Cassandra. [WaPo] [PBS] {stage directions:  two adversaries sit in tense silence across the room…}

“How can you keep running up these bills?”  Corollary to ” You promised you’d stop…“  If we were thinking that the popularity of credit default swaps might have declined in the wake of the housing bubble collapse, consider their use as European economies struggle.  [Bloomberg] As for the infamous CDO’s — some settlements have been agreed upon, but Morgan Stanley was exonerated from charges of defrauding a government pension fund (Libertas Case) because the offerers, not Morgan Stanley, prepared the statements. [Reuters] {stage directions: A throws pile of paperwork at B}

“You expect everyone else to clean up your messes.”  One such mess is “financialism.”

“Over the last 25 years American capitalism has become financialism, which is primarily transactional, unrestrained greed. Financialism embraces the view that the only purpose of business is to create shareholder value, measured primarily by short-term results. The dominance of short-termism is evidenced by the magnitude of institutional stock “renting” for terms of 12 months or less, the volume of high-speed, high-frequency algorithmic short-term trading, the short average tenures of chief executive officers and the dominance of executive compensation tied solely to short-term results.”  [Forbes]

And, this is a truly large mess, something Adam Smith never contemplated. Financialism distorts capitalism and creates middle class income stagnation, income disparity, off shoring jobs, diminished manufacturing capability, and equity market volatility.   It is the financial equivalent of being “excused” for leaving dirty clothing, empty pizza boxes, half-empty pop cans, and dirty tableware scattered about because “I’m busy.”  It is to trade short term profitability for long term stability.   If it’s messy, so be it, the “taxpayers” will clean up after us.   {stage directions: clothing, pizza boxes, pop cans hurled against wall to make a pile on the floor}

Rootless contends that by shifting the toxic securities into a FDIC-insured entity, the FDIC can simply shed them (toss in the trash) without harming taxpayers.

BofA may not be the Great Satan after all

bofa logoI’m amazed to be writing this. I’ve been a customer with BofA for around 15 years. My personal and biz accounts are with them, and they surely reflect my financial ups and downs. Lately there’s been more down than up.

I. Where I unload on cocky bank managers

The most recent target of my frustration has been the arbitrary holds on deposits. I had a situation a few weeks back where I deposited a check drawn on Citibank Smith Barney, and was informed that there would be a minimum 7-working day hold. This frustrated and infuriated me, since anyone who works next to or in the financial industry knows it doesn’t take 7 days for funds to turn around. Beyond that frustration was the red-hot anger that comes with a cocky branch manager telling you that there are no exceptions to the policy, a statement that is so false and so utterly in-your-face that it’s almost impossible not to understand how people snap in times like these.

The best was yet to come. Even with the subsidy for COBRA premiums on our health insurance, the costs equal over a week of what unemployment pays. I’ve hung on as long as I could, but finally had to face the fact that I needed to tap some IRA funds in order to make sure we kept things current. For once I thought ahead and took care of the transaction before the funds were needed, but expecting that they could be wire-transferred to BofA.

Unfortunately, they couldn’t. At least, not without a new 10-day waiting period while the wire voodoo between Fidelity and BofA was put in place. (As an aside, I probably could have hard-wired a link between the two in less time. Just sayin’.) However, Fidelity generously offered to overnight the funds at their expense. I was out of town, but took them up on the offer and asked BigDog to make the bank deposit as soon as the overnight arrived, which he did.

Keep in mind, this is not a two-party check. This is a funds transfer. That means those funds are guaranteed. There is no doubt; there is no question. When you transfer funds from one account to the next, the funds. are. guaranteed.

Yet, the cocky bank manager once again smirked his assertion that they “had no option but to place a hold on the check, but the funds would be available in 7 working days”. Yeah, on a Friday he said that. Do the math.

I was ballistic. No-holds-barred ballistic. The kind of ballistic where I could either start screaming or something worse. I opted for screaming. On Twitter. Loudly. Harshly. Angrily. To anyone who would listen. I fired up Twitter search and started answering every single person who was also complaining about BofA that day. You cannot begin to imagine how angry I was. Well, if you were on Twitter, maybe you can.

Oh, one other thing. 18 calls to the branch were unanswered. They sent me to the main customer service line (where nothing can be done because it’s a branch decision) every single time.

II. Where I discover BofA might actually get it

On Sunday morning I received a direct message on Twitter from @BofA_help asking me for my contact info so they could look into the problem.

At 6:30 AM on Monday morning I received a call from the executive offices of BofA. I wasn’t awake so they left a message.

At 9:00 AM they left a second message. I wanted to put together a chronology of what had transpired, figuring I would have to fight to get what I wanted. I was all ready with that on Tuesday when I received another call.

The call was, in my opinion, amazing. The nice man on the other side of the line said that he’d looked at the account, removed the hold, reversed some fees in my other account, and he apologized for my inconvenience.

I am not lily-white here. GoDaddy had tried to renew some domains, so my biz account was in the red. He didn’t have to look at or fix that account. He could have just told me the hold had to stay in place because I was overdrawn there. But he didn’t. He fixed it. The whole shebang.

Not only did he fix it, but he gave me a number to call if I had further problems. He was also extremely concerned about the lack of phone pickup by the branch and promised to look into it. Of course, he may not do that, but leaving me with the impression that he would made a huge difference, especially in light of the actions he’d already taken.

III. Lessons to learn

Obviously, the best lesson to learn is not to have overdrawn accounts. And dagnabit, I try my best, forgetting that paypal or GoDaddy might need some feedings from that account. So the next best lesson to learn is that in situations where you have at least a little bit of a leg to stand on, assert yourself.

With that said, I don’t think screaming on Twitter should be routine. I do think that what BofA knew is this: By responding to my rants, they would establish their commitment to a conversation via social media (something most brands don’t do), and in so doing, could be responsive and could repair the perceptions that many have about banks, financial institutions, and their bank in particular, given the current spotlight on them with regard to bank bailouts.

I also think they understood that my position wasn’t unreasonable. But what truly cemented things for me was the ‘above and beyond’ that was shown with regard to the overdraft fees on my biz account. That was something they didn’t have to do at all, yet they did, which to me is cause to not only give them a loud round of kudos, but also to cement a commitment to continue to bank with them and hope for better times soon. Heck, I might even be driven to recommend them if they continue to respond the way they did.

There’s a lesson here for brands, too. This didn’t start as a conversation with BofA but it became one because they chose to engage with me. They could have simply overlooked my rants and let them dissipate into the larger Twitter void of hour-old tweets and rants. But they didn’t. They actively pursued a conversation and solutions. My specific problem was solved, yes. But they sent a larger signal: they are committed to having a conversation with customers and finding a satisfactory pathway to resolution at a corporate level. That speaks well for the corporate culture, and hopefully will find its way to the cocky branch manager who really didn’t bother with a conversation as much as he handed down edicts.

So, my gratitude goes to them for the effort and the conversation. It makes me happy to be able to write a post where I can give kudos to a brand whose name is not always viewed positively. They get it. They are listening. They’re conversing.