Does Obama Hate Bank of America?

In the final stretch of the 2012 election, President Obama was heckled by some of his opponents for taking out a $15 million loan from Bank of America  (NYSE: BAC  ) .

What did the loan represent? Depending on who you ask and which side of the political aisle they sit on, there are plenty of answers. I'd argue that the reality was probably neutral: The campaign needed a short-term loan, and the money from B of A was there and at a reasonable price.

What the loan almost certainly didn't represent was any sort of presidential soft spot for the "too big to fail" bank. Asked by ABC's George Stephanopoulos back in 2011 about whether Bank of America's highly controversial debit-card fee could be stopped, the president responded:

Well, you can stop it because if you say to the banks, "You don't have some inherent right just to, you know, get a certain amount of profit if your customers are being mistreated. That you have to treat them fairly and transparently."

Which is wrong for a variety reasons. But that's a discussion for another time.

Looking back at it though, I got curious: What is Bank of America to the president? A useful lending institution, or a handy political punching bag?

Banking institutions in general weren't the president's biggest allies during the most recent campaign. None of his top contributors came from the world of finance. Meanwhile, Mitt Romney's top five (hat tip to OpenSecrets.org) looked like this:

  • Goldman Sachs  (NYSE: GS  ) : $1 million
  • Bank of America: $1 million
  • Morgan Stanley  (NYSE: MS  ) : $911,055
  • JPMorgan Chase  (NYSE: JPM  ) : $833,096
  • Wells Fargo  (NYSE: WFC  ) : $674,076

President Obama did pocket some campaign cash from B of A, but that $257,397 was a fraction of what went to Romney.

And while the president tapped B of A for a campaign loan, his personal finances lie elsewhere. According to his 2011 financial disclosure (again, courtesy of OpenSecrets.org), he has multiple accounts -- including a private client account -- with JPMorgan. He has another checking account and a 30-year mortgage with Northern Trust  (NASDAQ: NTRS  ) . And he has retirement and education savings in Vanguard, Calvert, and PIMCO.

When we put it all together, we can say the following: President Obama doesn't bank personally with Bank of America, but he is willing to give them business. He received some campaign support, but not nearly as much as his opponent received. And he doesn't have a whole lot to say specifically about the bank, but he's ready to jump on it when politically expedient. 

Which, if we shoved that through a word-crunching sausage maker, probably yields a very un-shocking conclusion. That is, that the president doesn't have much of a tightly held opinion on B of A except to the extent that it helps his ends. What are his ends? When it comes to B of A, I'd say it boils down to helping the economy get back on track, and making the banking sector appear to be adhering to and benefiting from the industry changes that have come about during his administration. 

Sure, you can interpret it more cynically. But if I'm right, and that's really the calculus behind his view on B of A, then his bottom line is one that is in-line with a positive bottom line for the bank -- and the economy as a whole. And it's hard to argue with that.

Should you buy Bank of America?
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  • Report this Comment On April 19, 2013, at 2:42 AM, bo4901 wrote:

    This used to be a great bank that cared about its customer and was focused on customer satisfaction...but over the past 6 years I've watched this bank go from terrible to worse! They lie, they cheat, they steal, and then they pretend to care with a lame apology and nothing ever gets fixed or corrected. They'll charge you fees for free accounts and then make to spend hours of your time and effort getting them back, only to respond, "Sorry, our mistake, we fixed the problem"...and yet it happens again. You'll never get repaid for the time you waste with this bank. They will steal your transferred credit card points and say that you acknowledged the transfer expiration of 90 days that was NEVER disclosed. They'll place holds on pending authorizations for days until the statement has closed in order to prevent you from using points and causing you to carry over a small balance for the next statement! They will sell your private personal information to anyone and everyone-regardless of your right to OPT-OUT and in violation of state and federal law. They will routinely route your calls to oversea call centers when they recognize you are calling from a number that they've marked as, "trouble maker"...their definition mearly being anyone who ever calls to have something corrected that they caused in error. They will answer you calls and questions with textbook responses that have nothing to do with the reason you're calling, but rather just a rewording of what you just said out of context; they'll laugh at you and press mute while you speak earnestly to try and have your situation addressed and they will go out of their way to ask so many personal verifying questions at times that any reasonable person can see that they are just attempting to frustrate you more into hanging up...they will purposely pretend that they cannot hear you and ask you to constantly repeat yourself, or they will intentionally enter incorrect information forcing you to be transferred to the fraud department to have your account unlocked...Trust me, I've been down the road with this bank for years with both personal, business, credit, loans, and mortgages! I've recently closed all of my accounts except for my credit cards for fear of harming my credit score and in an attempt to cash out on the numerous points I've accumulated over the past years-but you can't; new policies require all points to be redeemed in increments of 2500 and can no longer be transferred across accounts in any smaller increments...they stole 10's of thousand of my points that I had transferred over the phone and swore that I acknowledged a disclaimer that they would expire in 90 days if not used-yet they refuse to review the phone call that was supposively recorded...all this for a lousy $12.50, yeah crazy huh, spend a whopping $2,500 dollars with them and those 2500 points will only net you $12.50. I HATE THIS BANK...YOU'VE STRESSED ME OUT, CAUSED ME GRIEF, STOLE FROM ME, WASTED MY TIME, ALL FOR BEING A LOYAL CUSTOMER THAT NEVER MISSED A PAYMENT AND KEPT TONS OF MONEY IN YOUR BANK AND USED YOUR CREDIT CARDS ON A DAILY BASIS...YEAH, NO MORE! THANKS FOR NOTHING PRANK ON AMERICA!!!

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