Divorce, (Bank of) America Style

My wife and I are divorcing. Not each other. We’re divorcing the Bank of America.

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.”

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About middleagecranky

The Middle-Age Cranky blog is written by baby boomer Howard Baldwin, who finds the world, while occasionally wondrous, increasingly aggravating.
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10 Responses to Divorce, (Bank of) America Style

  1. Hypatia says:

    Bravo!

    We did the same….and refinanced our mortgage at a credit union…and finally paid it off this year. The stupidity of large bureaucratic companies….operating without “customer intelligence”:-) Perhaps they should read our reports? Best, Leslie

  2. Believe me, ours is not the only story of corporate idiocy I’ve heard over the last few weeks. And it’s not just Bank of America (but their name comes up a lot).

  3. Lisa Marie Daniel says:

    Howard,
    In an interesting coincidence, your column appears just three days after I spent over two hours on the phone with Bank of America representatives trying to help my non-English speaking and not-really-literate (although very smart) cleaning lady figure out why they had sent her a letter stating there was concern about fraud involving her B-of-A Visa card and that they were putting a “fraud hold” on it. Not until about an hour and 40 minutes into this process and the sixth (yes, SIXTH) person I spoke to, were they able to explain what had caused their concern, which had to do with her having used a card they had supposedly replaced, though it showed an expiration date of January 2011 (which hasn’t happened yet, as far as I am aware), and whose replacement she never activated because it required that she use a landline that she no longer has. This, despite the fact that EVERY single one of the people we spoke to before the sixth one was told that there were TWO cards in question and the different account numbers. To say that it was a frustrating experience, well . . . I guess you’ve been there. Congrats on your divorce!
    Take care,
    Lisa

  4. Diane says:

    Bravo Howard.
    I’m doing that home loan modification song and dance, who knew it would be so entertaining?

  5. I’m not sure “entertaining” is the word I’d use. You have my sympathies, Diane.

  6. Dave Flack says:

    We are just starting the refi process with Chase, our current mortgage holder. They initiated this idea including lower our rate from 5.68 to 4.25% ! They gave us several closing cost vs. interest rate options. We are completing the transactions entirely using pdf files sent via email. They say they will allow the refi within our revocable trust. As my Mama used to say, if it sounds too good to be true…. I’ll let you know how it goes.

  7. Charlie Ahern says:

    I gave up on BoA several years ago. I think it had to do with daily overdraft fees. By the time I realized that I had bounced a check, they had hit me for several fees. I guess they never thought to call the phone number on the account to give me a heads up or move money from my savings account. Like many other banks, BoA became too dependent on generating fees rather than making consumer loans.

    Now I use Keypoint Credit Union and have set up a trigger that alerts me when my checking account balance drops to a specific threshold.

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