Is Bank of America a Good Bank?
There are so many banks out there it's hard to distinguish between them all. However, when I started looking into the stock price of certain banks it became glaringly apparent that Bank of America had some very real problems. So, as is my nature, I decided to delve a little deeper...this is what I discovered.
The History of Bank of America
Bank of America is the largest bank in the United States at $2.3 trillion in assets. The largest bank in the entire world is the Royal Bank of Scotland at 3.8 trillion dollars. Bank of America began as the Bank of Italy in San Francisco in 1904 by Amadeo Giannini. He started it to assist immigrants that were otherwise turned down by established banking institutions.. He was raised by the Fava/Stanghellini family after his father was shot dead while trying to collect on a $10.00 debt. The original bank was located in a saloon directly across from the Columbus Savings and Loan. After the San Francisco earthquake Amadeo was one of the few bankers able to rescue his money from the flames. He immediately started giving out loans to anyone who would use the money to help rebuild the city. In 1928 he merged the Bank of Italy with the Bank of America in Los Angeles. Giannini helped nurture the motion picture and wine industries in California. According to Wikipedia he loaned Walt Disney the funds to produce Snow White, the first full-length, animated movie to be made in the US. During the Great Depression, he bought the bonds that financed the construction of the Golden Gate Bridge. During World War II, he bankrolled industrialist Henry Kaiser and his enterprises which supported the war effort. After the War, he visited Italy and arranged for loans to help rebuild the war-torn Fiat factories. Giannini also gave capital to William Hewlett and David Packard to help form HP or Hewlett-Packard. In 1958 the bank created the BankAmericard which later became Visa. Through many purchases and mergers Bank of America has grown to be the largest bank in America today.
Current Issues with Bank of America
Although Bank of America began with such good intentions at some point the giant corporation seemed to have lost its way. In 2010, according to Wikipedia the bank was accused by the US federal government of defrauding schools, hospitals, and dozens of state and local government organizations via misconduct and illegal activities involving the investment of proceeds from municipal bond sales. As a result, the bank agreed to pay $137.7 million, including $25 million to the Internal Revenue service and $4.5 million to state attorneys general, to the affected organizations to settle the allegations.
Former bank official Douglas Campbell pleaded guilty to antitrust, conspiracy and wire fraud charges. As of January 2011, other bankers and brokers are under indictment or investigation
On January 16th 2009 Bank of America received a 20 billion dollar bail-out from TARP (the troubled asset relief program) with an additional 188 billion for potential losses to the company. Bank of America had already received 25 billion in 2008 from TARP. According to a March 15, 2009, article in The New York Times, Bank of America received an additional $5.2 billion in government bailout money, channeled through American International Group. Bank of America announced that it completed the repayment of all $45 billion dollars on December 9th 2009. How they did it I don't know.
Today, Bank of America appears to be fraught with problems, the stock price is at an all time low of around $8.00, Warren Buffet recently infused B of A with another 5 billion dollar bail-out, they are being sued for misrepresenting the quality of their mortgages and complaints about shady practices are at an all time high.
While most of us have heard about the notorious crime committed by Bank of America which involved the foreclosing on a home that Bank of America didn't even own, not very many know about the shenanigans and fraudulent practices Bank of America customers are accosted with on a daily basis.
Real examples of complaints can be seen at www.Consumeraffairs.com by Bank of America customers and are but the tip of the ice-berg. They include paying bills online early so that the customer is charged an overdraft fee and then refusing to reverse the fee; paying an auto loan using Bank of America's online transfer service but having the payment skipped by Bank of America thereby incurring late charges; having the online bill pay system fail to register bills paid or paying them twice and then getting the run around when customers tried to get the situation cleared up and taking up to 11 days to have money refunded that was taken out of customers accounts without permission to name a few.
Like I said these are but the tip of the ice-berg when it comes to complaints against Bank of America. While I realize that switching banks is a big pain in the a** due to automatic withdrawals and direct deposits it would seem to me that if you haven't had any trouble with Bank of America it is only a matter of time!
Related Articles by Brie Hoffman
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- TD Bank and Bank of America: A Tale of Two Banks
- U.S. Set To File Suits Against Big Banks Over Mortgages
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