There aren’t too many people or entities with whom I’ve had a relationship for 36 years, and now there’s one less.
Ironically, this split came about because we wanted to do more business with the Bank of America, rather than less. Instead, we’re doing none. In order to be more fiscally prudent — the kind of customer you’d think a bank would want — we asked the bank to refinance our adjustable-rate mortgage with a fixed-rate mortgage. We were declined after three months of requests for a seemingly endless amount of documentation and being told three times that the papers were “about to be drawn” (I still don’t know what that means).
Why did they turn us down? Because my income went down last year. Gee, there’s a surprise. I’m self-employed. There was a recession. It was in all the papers. Nevertheless, this seemed to be a sticking point for the bank, even though that among all that documentation was clear evidence that my income tracked the economy. When one went down, so did the other.
I found the bank’s obsession with this single data point a little odd. After all, I still made a tidy income. My wife still made a tidy income. We had a tidy 33% equity in the house. We still had a tidy amount stashed away in stocks and mutual funds (many of which were with Merrill Lynch, a division of Bank of America). And there were the 36 years, which I thought should account for something.
So I did what I usually do in these situations: I alerted the CEO that within the organization lurks an idiot.
This was not the first time I’d written to the CEO of Bank of America. Many years ago, just after it was acquired by NationsBank, I’d encountered a similar situation. I wanted to have an ATM/debit card for our joint account, to avoid having to write checks. The bank told me that that wasn’t possible. Debit cards weren’t linked to accounts — they were linked to individuals, and individuals were only allowed one debit card.
This seemed like an arbitrary and bizarre policy, so I wrote to Hugh McColl, who was then CEO. In about three weeks, I got a call to inform me that my additional debit card would be arriving in a few days, and that I should take it into my nearest branch to activate it. McColl was a man who understood customer service. He was also a fourth-generation banker.
Times have clearly changed at Bank of America. Five weeks after my initial query to CEO Brian Moynihan (who is … hmm …a lawyer by training), I received a letter from Judy Kelly, the “customer advocate” in his office. Ms. Kelly’s response parroted almost verbatim everything I’d already heard from the mortgage underwriters who’d caused the problem in the first place.
“Lending guidelines have changed drastically over the past two years,” she wrote. That may be true, but I’m reasonably confident no one has rescinded the rules governing how you should treat long-term customers. She clearly did not understand that I had written to Mr. Moynihan in the hope that someone outside the underwriting department would apply some broader context to the situation.
In the industries with which my spouse and I are most familiar — medicine and journalism — basing conclusions on single data points while ignoring context is dangerous. In my business, it can get people fired, and in my wife’s business, it can get people dead. The banking industry is not exempt from this common-sense notion. But then, current economic history shows that banks aren’t necessarily overflowing with common sense. That’s why we’ve replaced the Bank of America with a local credit union. Meanwhile, the monthly payment on our adjustable-rate mortgage keeps dropping.
So it’s a happy ending for almost everyone, except for the bank. To those folks, I can only impart the paraphrased wisdom of Captain Renault in Casablanca: “How extravagant you are, throwing away customers like that. Someday they may be scarce.”