"Fear of a name increases fear of the thing itself."
-- J.K. Rowling
If Harry Potter author J.K. Rowling's perception of name fright holds true, Bank of America (NYSE: BAC ) could be facing some serious buyer's remorse in the coming months.
After the pending acquisition of embattled mortgage lender Countrywide Financial (NYSE: CFC ) , BofA plans on ditching the Countrywide name in favor of its own less-tarnished label. Perhaps for good reason, BofA typically discontinues an acquisition's original moniker. Countrywide -- the nation's largest mortgage lender -- has become synonymous with the subprime debacle and the bloated lending practices that played a role in what has become one of the most rotten housing markets in decades.
A stained name can have a lasting effect on customers' brand awareness. I got a good chuckle recently when noticing an anti-crime poster outside a local Countrywide lending branch that read, "No cash in store." It had been graffitied out by an unknown individual to read, "No cash in company." Talk about negative public perception.
Adding to the shady reputation, Countrywide's high-profile CEO, Angelo Mozilo, recently caused Congress to raise an eyebrow when he, along with executives from Merrill Lynch (NYSE: MER ) and Citigroup (NYSE: C ) , reaped massive fortunes while their respective companies withered away. Being at the center of both the subprime lending fiasco as well as the overpaid CEO debate, even with Mozilo's impressively deep tan, won't get you many votes on the "most admired companies" list.
What's in a name?
Bank of America isn't the only one attempting to revive potential through a name change. Back in 2003, cigarette titan Philip Morris changed its corporate name to Altria Group (NYSE: MO ) in part to ditch the tobacco stigma attached to the Philip Morris name. The original name may have drawn attention from its non-tobacco assets, which at the time included food giant Kraft (NYSE: KFT ) .
Whether or not Countrywide the business holds on through the rest of the credit crunch is another story. For now, we know for sure Countrywide the name will soon be a faded memory.
R.I.P., Countrywide. Best of luck with your new identity.
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