Sunshine State Rains All Over Bank of America

Whether it comes to being, in general, the most scorned of all banks, or the worst possible mortgage lender in particular, Bank of America (NYSE: BAC  ) usually wins -- if you can call it that -- handily. Time after time, market research surveys and government databases show that, of all the banks that people complain about, B of A always garners the lion's share of grievances.

Florida shows its disdain
Recently, the Consumer Financial Protection Bureau decided to pinpoint from which states consumer complaints regarding banks were originating. Not surprisingly, since it was one of the states that suffered the most during the mortgage crisis, Florida was found to have registered nearly 11,570 gripes about banks and their service. Of those complaints, 23% were aimed squarely at Bank of America.

Other banks were criticized, too, though not to the same extent. Wells Fargo (NYSE: WFC  ) is the second-largest bank in Florida, after B of A, but it received only 14% of the complaints, and JPMorgan Chase (NYSE: JPM  ) tallied 10%. Citigroup (NYSE: C  ) collected a mere 6% of the total.

Customers aren't the only ones incensed over Bank of America's mortgage service. Florida's Attorney General, Pam Bondi, has sent a letter to bank officials about compliance lapses her office allegedly has seen in B of A's handling of its part of the National Mortgage Settlement -- a pact that she herself helped negotiate. She noted that her office has received nearly 300 complaints since last August, when a special liaison was set up to record problems between borrowers and the banks.

The New York AG's Office, as well, has recently announced its plan to sue B of A and Wells Fargo for violations of the $25 billion settlement, though that case is currently on hold.

Brownie points for Wells Fargo
Possibly due to this announcement from the CFPB, Wells Fargo decided last week to settle a dispute regarding its own foreclosure practices, pledging $42 million to several states where it was alleged that it did not maintain bank-owned properties in minority neighborhoods as well as it did those in white areas.

Florida, which received part of this settlement, praised Wells while noting that Bank of America and U.S. Bancorp (NYSE: USB  ) , also named in the complaint, hadn't yet done the same. The latter bank, incidentally, registered approximately 1.2% of the complaints logged by the CFPB.

Displeasure with Bank of America is endemic
Unfortunately, negative feelings toward B of A aren't limited to surveys and consumer complaint databases. A quick trip around the Internet turned up several sites that log consumer concerns, and Bank of America rated poorly on each one.

My Bank Tracker rated the bank a "2 out of 5 marks" on every scale, based upon nearly 650 consumer reviews, and consumeraffairs.com registered an overall rating of a smidge over one star -- out of five -- based upon 950 ratings. This site also noted that "hate" was the dominant emotion that consumers projected in their comments about the bank.

The granddaddy of all opinion sites, Amplicate , showed that B of A's "hate" rating was a disquieting 89%, based on more than 26,000 reviews. Wells rated 87%, albeit on a scant 2,900 comments, and JPMorgan got a hate rating of 78%, based upon about 5,800 reviews. One unsettling thing I noticed here is that complaints regarding Bank of America seemed to be decreasing from February through April, but they began to climb again in May.

Unfortunately, the efforts being made by CEO Brian Moynihan to spruce up B of A's image with consumers don't seem to be working. Despite the gains the bank has made over the last two years, I do think this issue needs to be constructively addressed if Bank of America is to regain its former glory. There's a lot of work yet to be done in this area, and B of A obviously needs to step it up.

Wells Fargo's dedication to solid, conservative banking helped it vastly outperform its peers during the financial meltdown. Today, Wells is the same great bank as ever, but with its stock trading at a premium to the rest of the industry, is there still room to buy, or is it time to cash in your gains? To help figure out whether Wells Fargo is a buy today, I invite you to download our premium research report from one of The Motley Fool's top banking analysts. Click here now for instant access to this in-depth take on Wells Fargo.


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  • Report this Comment On June 10, 2013, at 12:29 PM, questioner5000 wrote:

    Hilarious!

    Bank of America should have allowed Countrywide to go completely bankrupt, and then, with the government begging them to take over the carcasss, insisted on buying only the parts they wanted, all-cleaned up and void of any legal responsibility for Countrywide's misdeeds. Instead they stupidly took over a damaged company, saved thousands of jobs, shredded its shareholders' investment in what otherwise was a fairly clean bank, and opened itself to the claims of those greedy funds that now claim that they were unaware of the poor quality of Countrywide's mortgages, (when, in fact, they knew exactly what was going on, but, in their pursuit for greater returns, felt that the real estate market would never collapse as it actually did). Then there were the hordes of real estate "investors", (especially in Florida, California, and Arizona), that simply walked away from their Countrywide-funded investments, knowing that they couldn't be pursued for "deficiencies". And what about those who could afford to pay their Countrywide mortgages, but walked away because they were "underwater", while claiming that the bank wasn't reducing their loan principal on demand, (which is apparently a new legal right that the government has told consumers that they are "entitled" to). And what about those who are mad because, after living payment free for a couple of years, are now up in arms because "shortcuts" were taken by the entire industry to finally foreclose on the tsunami of deadbeats, and these poor souls are now furious because they haven't been sufficiently compensated for the bank's "robosigning SCANDAL", (as if two years of free rent wasn't already enough).

    Look, the government did a magnificent job, cynically making the banks scapegoats for the entire housing collapse and recession, to cover up their own culpability. Of course, during election campaigns, you can't tell voters who bought too much house, or kept refinancing and draining equity out of their real estate, that the collapse of the housing market had a lot to do with their getting themselves in holes that they couldn't (or wouldn't), dig themselves out of. Instead, you tell them that they were tricked or were too dumb to understand what the brilliant bankers were forcing them to do.

    The banks have suddenly become everyone's whipping boy and piggybank. Take a bank like Bank of America that always had a reputation for progressive practices with minorities, and fine them $345MM for the discrimination claimed against Countrywide. Bank of America announces an easily avoidable fee on Debit Card customers, (after billions in earnings were taken from them and "donated" to major retailers, who, of course, will pass their savings on to consumers, right?), and Sen. Durbin tells customers to close their Bank of America accounts, when, if fact, both Wells and JPM were already "test-marketing" the very same fees.)

    Unfortunately, once the banks recover from the latest mess, they'll be forced to get into other messes by government coercion. One hell of a way to tell responsibility to our kids!

  • Report this Comment On June 10, 2013, at 12:45 PM, sluggo47 wrote:

    I just went on Ampllicate and read a lot of the bad reports on BAC. What a bunch of whiners. The feedback above says it all !

  • Report this Comment On June 10, 2013, at 2:00 PM, supplyside2 wrote:

    "Recently, the Consumer Financial Protection Bureau decided to pinpoint from which states consumer complaints regarding banks were originating".

    You gotta love it. Our tax dollars at work to support a "bureau" to pinpoint state locations of complaints about the banks. Gee, critical data. Sharp boys! After 3 years of this government branch in place this is what they have come up with. lets get on with that new study to pinpoint which states have the highest number of complaints regarding tax waste??

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