Bank of America Broke Everyone's Heart. It's Sorry and Wants Your Forgiveness

Since the financial crisis, Bank of America (NYSE: BAC  ) and its reputation have taken a beating. With scathing reports still hitting the headlines about the bank, is there anything else the bank can do to repair it battered image? In this segment from The Motley Fool's everything-financials show, Where the Money Is, banking analysts David Hanson and Matt Koppenheffer discuss what the bank has done to try and repair's image and why its reputation isn't shouldn't scare away investors.

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Full transcript below

Matt Koppenheffer: Moving on, we’re going to go to … who do we have next?

David Hanson: Bank of America.

Koppenheffer: We have Bank of America.

Hanson: Again.

Koppenheffer: Yeah, we always have Bank of America. Bank of America and its reputation; we’re talking reputation here. We just had that article/column/exposé from Bloomberg yesterday. That just came out yesterday, right?

Hanson: Yeah, I think so.

Koppenheffer: It seems like ages ago.

Hanson: You’re all thrown off. You’re on West Coast time.

Koppenheffer: Thirty five hundred words?

Hanson: Yes, very long.

Koppenheffer: That’s why it seemed like it was so long, because it took me a long …

Hanson: A little bit scathing.

Koppenheffer: Very scathing.

What does Bank of America do at this point? And when does this stop? To be fair, for journalists this is like the well that never runs dry, because articles like that are like catnip for readers. I read the whole thing -- I read it from start to finish.

At what point do journalists stop seeing receptivity? When do they stop finding new stories that catch that kind of …?

Hanson: I don’t know. I don’t know if we have an exact time, but I think it will happen.

Koppenheffer: I was hoping you’d give me an exact day.

Hanson: I don’t have an exact time, but it seems like time will heal all these wounds. We’re still very close to the financial crisis; I know we always forget that. It was five years ago -- so long ago.

It wasn’t that long ago. A lot of this stuff will continue to get worked through, and I think in the long run their reputation will get better, just because there will be less interaction between banks and their customers -- human interaction, whether you think that’s a good thing or a bad thing -- but depositing a check over your phone; that’s you not going into a Bank of America branch and potentially being aggravated by having to wait in line, not being serviced the way you want to.

I think there will be less interaction, the Morgan stuff will get worked through, so I don’t think they should do anything drastic. They have their commercials coming out; they’re saying, “Life’s better when we’re connected.” “Bank of America’s there when you want us, but we’re not going to be the main thing in your life.”

I think they have the right strategy in place. You look at Brian Moynihan; he really looks up to Anne Finucane, who’s in charge of this strategy in terms of getting the reputation back in place. I think he said, “Ultimately, we all report to Anne,” so this is obviously front and center in his mind, getting their reputation back. It’s not there yet, but I think they have the pieces in place.

Koppenheffer: A lot of what we still continue to hear, whether it be Bank of America or any of the other big banks, the well that doesn’t run dry comes from 2008-09, and to some extent the beginning of 2010.

If you look ahead five years, do you think we’ll see some of the same kind of stories coming out of 2012 and 2013?

Hanson: It’s hard to imagine the same level. The level of scrutiny that banks are having today, in terms of what type of loans they’re writing -- because that’s really what the problems get down to is, “Was it a bad loan?” If it’s a bad loan, then all these other problems are going to come from it, whether it’s foreclosure ...

It’s hard to imagine that it’ll be as bad. Maybe there will be some stuff, but I think you have to be optimistic that it’ll slowly go away.

As investors, you have to remember that this is part of the story, but it’s not the whole story with Bank of America. You still have to look at the performance, the valuation; this is just one cog in the machine of whether you’re making an investment here.

Koppenheffer: Well, and you’ve got millions of customers.

Hanson: Right.

Koppenheffer: What I’m hearing from you is that this story does not change how you’re viewing Bank of America.

Hanson: I don’t think you can let this stuff judge what’s going on in the market. If you let every negative story about any company impact whether you’re going to make an investment or not, you’re never going to buy a stock for the rest of your life. Anybody can say something bad about any company. I think you have to take it as noise, more than signal.

Koppenheffer: I’m trying to think of any company that I haven’t heard a bad story about.

Hanson: We talk about a private company, Uber, that’s been great. All the customers love it.

Koppenheffer: Did you see that?

Hanson: I saw you tweet a story this morning about how they do their -- “price gouging,” some people are calling it -- supply and demand. They were charging 8x the normal rate, and now people are saying bad things about Uber, so even companies that people love, stuff comes out.

Koppenheffer: Still love Uber.

Hanson: Still love Uber, but I’m not paying 8x.

Koppenheffer: No, I’m not. What they said -- I didn’t see the actual quote from this, but what the article said that Uber was saying, is that, “Well, when the prices go up, people can walk instead.” That’s essentially what my wife and I do when those prices go up; we’ll take the Metro. We’ll take the Metro, that’s a better deal.

Hanson: Exactly.


Read/Post Comments (10) | Recommend This Article (8)

Comments from our Foolish Readers

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  • Report this Comment On December 22, 2013, at 2:28 PM, Wasatcher wrote:

    Bank of America stole our life's work and, even though that bank did not expend one thin dime on our behalf via a mortgage loan, they got the money for the short sale of our dream home and we had to claim it as income. After Fraud Street destroyed the economy, which resulted in the destruction of our business that we ran successfully for TWENTY FIVE YEARS, BofA repeatedly insisted it couldn't help us keep our long term investment in home ownership, in which we had invested hundreds of thousands of dollars, but they didn't even pause to think about it before accepting $280,000 for our dream home from a rich man who offered CASH and now lives in our house HALF the year as his second home!

    You want forgiveness, Bank of America? Screw you -- you're not getting it!

  • Report this Comment On December 22, 2013, at 3:36 PM, JustDoSumpin4US wrote:

    I went to Bank of America on a foreclosure they owned and had posted for sale - and they insisted that I had to go through them and them only for the home-loan. What happened? They made me wait 4 MONTHS for a decision and then accepted a cash offer of less than 50% of my offer from someone else! When I asked the bank loan officer what the reasoning behind the decision was he said that they had decided that cash was worth more than debt! If these people had allowed me to go to ANYONE else besides them for the loan they would have had DOUBLE the cash without the debt and the home would have sold quickly! BofA makes poor decisions like this ever single day! How does this bank justify making slow moronic decisions that alienate its customers and also create a Cash LOSS for itself?

    You want forgiveness BofA? Then consider your customers as the driving force behind your stock..

    1) Just simply stop this incessant sucking-up to only your stockholders and actually do something constructive for your customers instead and you'll be ore successful than you ever were! 2) Investigate and go through your own records and make an effort to undo the harm you created to your past customers. Offer those people value incentives to bank with you again! 3) And most important: create common-sense policy that doesn't hurt your customers yet still allows you to make money.

    WAKE UP BofA - that sound you're ignoring is the sound of angry dissatisfied customers screaming at you while walking out the door! The most basic rule of business is that your customers are the primary stockholders. Once you forget this you will suffer the consequences...

  • Report this Comment On December 22, 2013, at 6:14 PM, bgv1969 wrote:

    BOA ISN'T SORRY FOR ANYTHING!!! THEY HAVE STRUNG US ALONG FOR ALMOST 5 YEARS!!! WE HAVE COMPLETED 33 MODIFICATION PACKETS AND THEY'VE ATTEMPTED FORECLOSURE 4 TIMES NOW. WE WILL BE FORCED TO ACCEPT A DEED IN LUI OR BE EVICTED FROM OUR HOME OF 15 YEARS IN THE MIDDLE OF WINTER IN OHIO!!WE HAD AN ATTORNEY THAT TOOK $$$THOUSANDS $$$ FROM US PROMISING WE WOULD GET A MODIFICATION.. HE CONVINCED US TO DECREASED OUR INCOME TO QUALIFY THEN DROPPED US AS CLIENTS!!

  • Report this Comment On December 22, 2013, at 6:20 PM, bgv1969 wrote:

    EVEN THE OHIO ATTORNEY GENERAL WONT HELP US!!! MY HUSBAND IS 64 YEARS OLD WE'VE BOTH BEEN ILL, AND HAVE HAD REDUCED INCOME DURING THE LAST 2 YEARS BECAUSE OF IT. HE WAS LAID OFF IN 2009 &2013. AND ILL 2010-2013. WE HAVE MINOR CHILDREN AND STILL CANT GET ANYONE TO HELP US!!!

  • Report this Comment On December 23, 2013, at 10:36 AM, phatandfoolish wrote:

    let's see. when i was banking with bofa several years ago, their attitude pretty much was, if you don't like it, well, screw you.

    well, bofa, screw you..

  • Report this Comment On December 23, 2013, at 11:19 AM, byteMeImblonde wrote:

    This article recalls for me that old African tale about the crocodile and the scorpion where the scorpion pleads for a ride across the fast-moving river and finally the crocodile assents only to be fatally stung in mid-stream. The crocodile in its last moments asks why the scorpion would cause them both to die, merely shrugs and says: "I'm a scorpion and that's the nature of a scorpion."

  • Report this Comment On December 23, 2013, at 11:38 AM, edteked wrote:

    Yeah...ain't gonna happen BofA. The only thing they can do is break up the company and fire all the initialed executives. BofA has not only screwed their customers, but their employees as well! How does the saying go? Don't $h!t where you eat! I guess BofA didn't get that memo...all you have to do is visit SEIU.org then go down to the bottom left of the front page and search for "Bank of America" and read up on how they treat their own!

  • Report this Comment On December 23, 2013, at 12:23 PM, TerrifiedCitizen wrote:

    Any bank would repeat its 2008 era mistakes again in a heartbeat if it thought it would make money.

    The only way to reduce the world's bankers stranglehold on you and the economy is to at least return to a cash-only economy. There are alternatives to cash that are even better, but this one move will result in a much happier population.

  • Report this Comment On December 23, 2013, at 9:46 PM, frmrphxhomeowner wrote:

    B of A took my home. I worked with them in good faith for over a year. I made my payments but was forced to stop because they wouldn't negotiate with me until I stopped making payments. First, they said my house wasn't worth more than $147k (I paid $395k for it) and then when I short sold it for $200k they said it was worth $280. Did I mention that they sold it for $145k...$55k less than the short sale price I negotiated?

    I burned hours and hours of time while trying to keep a business afloat. Did I mention that I am a single mother? I bought a house I could afford with a fixed interest rate and was trying to refinance and they refused until 1 month before foreclosure and then, they offered me the "potential" for a modification...no guarantees, though.

    B of A can kiss my backside. I will NEVER do business with them for the rest of my life.

  • Report this Comment On December 24, 2013, at 1:51 PM, lear05 wrote:

    Bank of America is a thief and an it is incomprehensible that they are still in business with all of the people have hurt, driven into Bankruptcy and caused mental and physical anguish. Why wont someone with influence do something to help the poor people who have been victims of the Loan Modification Scam, the Foreclosure threats etc. I am so sick of trying to get help from the agencies who are supposed to be protecting the Consumer, but who time and time again come down on the side of these vultures. When will we get justice !!!!!!!!!!

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