In the last few days a story has emerged concerning the Bank of America terminating all dealings with their existing corporate customer because the company — horrors! — manufactures firearms.
http://www.rogerhedgecock.com/story/17668445/bank-of-america-drops-mcmillan
Naturally gun owners are incensed, as am I. But I’ve had a longstanding dislike for B of A. We had quite a row years ago — they “done me wrong.”
Bad idea, B of A. As a result, I very publicly kicked Bank of America’s butt from San Diego to San Francisco. Payback’s a bitch, as B of A found out. Here’s the story:
My Very Satisfying Battle with Bank of America
by Richard Rider
Back in the early 1990’s, I had an extremely annoying run-in with Bank of America. With their usual disdain for the small individual customer, they treated me poorly. But I got even – big-time. Perhaps others might find this story and strategy useful in dealing with unresponsive businesses or governments.
For over a decade, my wife and I had a large safe deposit box at Security Pacific Bank. As is often the case, a bigger bank bought out Security Pacific. In this case, the buyer was Bank of America.
For several years, we also had a checking account at Security Pacific, but finally switched the account to another financial institution for competitive reasons. Yet we kept the large safe deposit box after SP was taken over by B of A. We visited our safe deposit box at most once a year, so the $40 annual rental for the large box was a nice profit item for the bank.
One day I went into my B of A branch to get my signature guaranteed on some stocks. This process can be done only at NYSE brokerage firms or commercial banks – not at S&L’s or credit unions. It is very similar to getting something notarized, with the same verification process.
The bank officer and I worked our way through the forms, properly signing and stamping everything in about 20 minutes. Then the officer went to the bank manager to get final authorization.
I was surprised when the bank manager curtly told me that she would not allow the process to be finalized. The problem was that I was not a bank customer.
Two problems with that assertion:
1. I WAS a bank customer.
2. They should have come to that conclusion before we stamped and signed my stock powers.
I patiently explained that I had a safe deposit box with the bank, and had a relationship with the branch dating back over a decade. The bank manager said that B of A policy mandated a checking or savings account for providing such a service, ostensibly for verification of identity (which, of course, was ludicrous, given that I had a safe deposit box which required ID before every entry).
Given that the stocks were already stamped by B of A, it seemed they had me over a barrel. So I offered to open a checking account. They would do so, but the manager informed me that I would have to wait SIX MONTHS before I could come back in to get the stocks’ signatures guaranteed.
By now I was really ticked off. I asked the manager if they had unused large safe deposit boxes. Yes, they had a number of such boxes available.
I informed her that they now had one more empty box – that I was closing mine on the spot. She was unperturbed. B of A does not sweat the small retail customer.
I took my certificates and all the safe deposit contents (making an awkward sight, I’m sure) across the parking lot to Wells Fargo Bank branch. I explained that I needed my signatures guaranteed on certificates already messed up by B of A, and that I needed a safe deposit box.
WF told me I didn’t need to rent a box or open an account to get the signatures guaranteed for free, but they would welcome my business. I was so delighted that I opened a box and a checking account. Since then I used WF to provide the mortgage on our new home, and I’ve had other successful dealings with them.
But I still felt I had to properly discipline B of A. I used a simple yet effective weapon, enhanced by the technology of the time.
I wrote a letter to the editor. The theme was that big banks can be good – or bad. I reiterated the saga in abbreviated format, naming B of A and WF.
Then I distributed the letter using a computer fax broadcast system I had set up at the time for political matters. I sent the letter to almost 500 California media outlets – print, radio and TV. It took most of the night for my computer to complete the fax broadcasting of my letter.
The letter was published – everywhere. It ran in the SF Chronicle, LA Times, SD Union-Tribune – plus many other places. In addition, a couple of radio and TV stories covered the matter.
The day the letters started running, I started getting calls from higher-ups at B of A in the San Francisco headquarters. They profusely apologized for the “error in judgment” by their bank manager. But the bank manager “was just following orders” – as laid out in the bank’s procedure manual. I think five different bank officers called.
I can’t remember who the highest corporate officer was who called me, but I think it was the person just below the CEO. I had “frank discussions” with the B of A callers, but gave them no satisfaction.
THAT was fun! I managed to give B of A hundreds of thousands of dollars of extremely negative publicity – and it cost me maybe $25 in long distance calls. I’m sure the bank manager will forever remember me.
But then there was an unexpected consequence. About two weeks later, I went to my WF branch that had provided the needed services, and boy, were they nice to me!
The bank manager hustled over to greet me and see just what they could do to make my life pleasant. Indeed, I found my published letter to the editor blown up and prominently posted in a picture frame out front for all customers to see.
Thereafter the folks at WF were extremely good to me for two reasons:
1. I had done them a great service by hammering B of A while praising WF.
2. They were scared to cross me. Apparently bad things happened to banks that crossed me.
Bottom line: Sometimes the “helpless” consumer not only can take his or her business elsewhere, but generate negative consequences for the unresponsive institution. All without the use of government force. And it’s more true today than ever, thanks to the Internet.
Comments 21
Great post! Made my day!
Author
Thanks, Roger. Over the years, it’s seemed like half the people I talk with had something derogatory to say about B of A — often based on their personal experiences.
I figured bringing this story back up is the LEAST I can do for this anti-gun bank.
BTW, today I posted this item in a number of places including FlashReport and my Facebook page (about 2,900 “friends”) and tomorrow it’ll go out to the local media as a PR.
You’re welcome, B of A. Again and again.
Richard,
Great story. I always love it when the little guy fights back, but not even you are so full of yourself that you seriously believe that you “kicked Bank of America’s butt.” Last time I looked they were still the largest (maybe second) U.S. bank and considerably larger than Wells Fargo.
Author
Alger, let’s put it this way. I cost them many, many times the inconvenience they cost me. And I had loads of fun doing it.
Moreover, by sending this piece out again, I hope I AGAIN cost them some customers unsure whether to remain with this imperious, government subsidy-loving, anti-gun outfit.
But take ’em down? I’m certainly egotistical, but not THAT crazy.
“Last time I looked they were still the largest (maybe second) U.S. bank and considerably larger than Wells Fargo.”
Indeed it is. Thanks to the charity of 300 million US citizens, who involuntary loaned bailout money to it, and made it more difficult for competitors to compete against it,after it wrecked its franchise with the acquisition of Countrywide and Merrill Lynch.
Of course, Richard warned us of these characters some 20 years ago
You’re right Brian, but they did a lot of acquisition, they didn’t grow organically because of their ‘great’ reputation. I’ve had horrible experience in the corporate account arena too, you bought comm’l paper at a certain rate, to find out it was never bought…etc.
Brian,
No doubt that Bank of America benefited from the bank bailout, but so did Richard’s favorite bank, Wells Fargo. In fact, Wells Fargo received $25 billion in direct funds (http://www.cbsnews.com/2100-18563_162-4788018.html).
Richard,
Your favorite bank, Wells Fargo is a also a “government subsidy-loving” institution, $25 billion worth of government subsidy, in fact.
http://www.cbsnews.com/2100-18563_162-4788018.html
Alger, I know this doesn’t fit your narrative and I can respect that you are trying to argue with Richard Ryder, but the fact is the funds were forced onto banks because if the Democrats only “bailed out” the banks that needed it, it would have triggered a run on those already weak banks that would have finalized their demise. The funds were presented as almost a reward for doing such a great job and the purpose was for those banks to loan the money and get funds out into the stem.
I won’t bore you with an explanation of general ledger lines, but the money given to banks could not be used for bonuses or payroll or anything other than loans to the public. Banks, unlike the GSA, never used tax money for Vegas vacations. The government gave minimum requirements borrowers had to meet before the money could be loaned. Then Democrats turned on the banks in a brilliant PR move and they started dictating executive pay, etc and blaming the banks for ruining the system by giving horrible loans that the federal government forced them to give in the first place. So banks…including Bank of America and Wells Fargo…started paying the funds back as soon as they were allowed. Yes, allowed. The Obama administration was literally stopping them from paying the money back because he preferred banks under his thumb.
Banks were even forced to take on other institutions. Yes, Alger…forced. Do a Google search and read about how thrilled both sides were with the other when Bank of America was forced to buy Merrill Lynch. I’m not going to go in to whether or not all this government interference…I mean “help”…was good or bad, but Democrats (and some big government Republicans) shoved money down the throats of some banks who had no need for a bailout and now sit back and criticize them for taking it just to gain politically.
Anyway, your implication is wrong, Alger. Try again.
Michael,
Wells was a bank which was forced to take TARP; B of A desperately needed it (as did Citi).
Ken Lewis wrecked that brand by purchasing Countrywide and he wanted Merrill–he just didn’t realize how bad Merrill had become and got buyer’s remorse. Ken Lewis was an naive tool of the Democratic Congress & Ben Bernanke, selling out the stockholders for a moment or two of national fame.
TARP will be the instrument which enabled the planned collapse of our currency but that won’t be something you’ll read about in history books.
Alger, to verify what Schwartz is saying, go check out the PBS Front Line Series on this., “Money, Power, and Wall Street: Parts One and Two”. Each are about an hour long.
Essentially if the healthy bank CEOs had refused to sign the document and to take the money, the Treasury Department would publicly say they were undercapitalized. Some banks were threatened and coerced into going along by Secretary of the Treasury Henry Paulson, who in turn with the FED was trying to contain a financial crisis of epic proportions.
We are shocked, SHOCKED to learn that any business has ever been coerced by the gummint.
Brian and Michael,
I know you want to defend Richard and draw some distinction between Wells Fargo and Bank of America, but to do so you need to get your stories straight. Was B of A forced (by the government) to buy Merril Lynch as Michael claims or was B of A’s purchase of Merril Lynch voluntary and a main cause of how they “wrecked their franchise” as Brian claims?
T.A.,
On another topic. Why no mention of the huge tax increase approved yesterday to fund the Convention Center expansion?
It is important to remember that the reason can be traced back to the changes in the Community Reinvestment Act (CRA) which was changed to force banks to lend to people who could not pay the loan back. Or banks faced consequences (harassment by the federal government, denial of the ability to grow, etc) Basically, if you were a salesman for a bank in the late 90’s and early 2000s and sold credit…personal loans, equity loans, mortgages, business loans… you were required to check a government website to see if your prospect was located in a low to moderate income area. If they were, your loan was fast tracked and almost guaranteed to be approved. If banks did not back this kind of effort, then their business was hit with road block after road block.
Banks were force to make bad loans by the government and then criticized for following orders after it didn’t work. Then banks were forced to take money and then criticized for “needing” it. Democrats have earned the lion’s share of this blame, but honestly, there are some Republicans with blood on their hands too.
Alger, because it’s a conspiracy. Actually, because we’re a blog made up of volunteers, with the content being driven by what the bloggers choose to post, not by us. We don’t assume there will be posts about every subject receiving coverage elsewhere, or even pretend we can try to provide coverage of all things political. If a blogger wants to opine about it, they can. Also, if you’d like to do a guest piece about it, we’d accept it in your anonymity, since you are a regular. Thanks.
T.A.,
I would never accuse of you of conspiring to cover-up information. In case, you haven’t noticed, I have the utmost respect for this blog.
Michael,
The original purpose of my post was to questions Richard’s assertion that he kicked B of A’s butt, nothing more. I guess it morphed into a “is Wells Fargo really great and B of A really the devil?” With that in mind, my simple question still stands: Was B of A forced by the government to buy Merril Lynch?
Alger, we were kidding. Even thought about putting a 😉 after the first sentence, but thought it was obvious. Yes, agreed you respect the blog; the offer of a guest piece was not a joke and stands as an invitation.
Author
Just to be clear. I’m no fan of Wells Fargo. The article is a piece I wrote in the 1990’s to describe my experience. AT THE TIME, I found that WF was far superior to B of A, both in attitude and competitive services.
I haven’t banked at WF in many years. I did have a home loan with them, that’s long gone.
Since then I’ve banked at 4 or more institutions — banks and credit unions. If service was substandard or I found a good enough deal elsewhere, I switched. Ain’t competition grand?
Alger, I’m sorry my positive Wells Fargo kudos got your panties in a bunch. Much ado about nothing. You wandered off on a tangent because . . . well, just because you like to argue. In stark contrast to me, of course.
Even if I DID still prefer WF over B of A — my preference was based on SERVICE to the customer, not their subsidy intake. Never did I laud WF’s political stances, or free market championing.
Was BofA “forced” to buy Merrill? Ken Lewis says yes (although I believe he was happy to be the “hero”). What I DO know is that BofA NEEDED TARP to survive while Wells didn’t. What I DO know is that both were forced to take TARP money to provide cover for the poorly run banks.
Wells stood to gain market share and great assets, from BofA’s carcass. Small banks all over the country were poised to become big banks after picking over the carcasses of the dead behemoths.
Michael Schwartz is correct; the CRA provided horrible incentives for banks to get bigger by taking undue risk. The profits would have been privatized while the losses were socialized. The scheme failed and the taxpayers got stuck with even more socialized losses.
We’d have a whole new crop of well-run national banks today had the market been allowed to work. Instead, we have an anemic financial system which was weakened by more government intervention. Our taxpayers are exposed to MORE risk by Dodd-Frank.
It didn’t work for the Soviet Union in farming and it won’t work for the USA in banking. Centralized economic planning almost always results in shortages, rationing, and eventually mass murder..but hey…I remain stubbornly optimistic that reason will one day come back into fashion.