The big banks have certainly regained much of their financial health since the mortgage meltdown, but their reputations have not rebounded in tandem. And, when it comes to the most despised of all the TBTF banking institutions, Bank of America (NYSE:BAC) wins that title, hands down.
Why do people loathe B of A so much? The easy answer is, of course, its Countrywide division, with its stable of rotten, subpar loans written before the crisis. A new report from the Consumer Financial Protection Bureau bolsters that theory, but I think there is a customer service issue here, as well -- and slowly but surely, Bank of America is working to fix that problem.
Most consumer complaints are mortgage-related
The CFPB's list of complaints is dominated by those tied to home loans -- fully 55% of the database's 90,000 entries. While B of A was the subject of 30% of those grievances, its peers were implicated, as well: Wells Fargo (NYSE:WFC), which has grabbed one-third of the mortgage market over the past year, prompted nearly 16% of the grievances, with JPMorgan Chase (NYSE:JPM) coming in third with 10%. Both Wells and JPMorgan responded to the report by noting that they are working assiduously to resolve these complaints.
For its part, Bank of America has noted that its Countrywide issues have put it in the front of the troubled-loan lineup, which would naturally cause the bank to garner the most complaints. In addition, B of A points out that 98% of those registered complaints have been resolved. Indeed, it looks like the bank has been pulling its weight in that regard, taking it on the chin in 22% of these cases, and making it right with the customer. JPMorgan did so in 16% of complaints, and Wells only 9% of the time.
More work needs to be done
While it is clear that B of A is trying to resolve outstanding issues in this area, it will take some time for the dings to its reputation to smooth over. Incidents from the past, such as when the bank attempted to foreclose on homeowners who didn't even have a mortgage, continue to rile people and fuel the anti-B of A fervor. A general distaste for the way the big bank treats mortgage customers has made Bank of America a serious contender for Consumerist's Worst Company in America... for the third year in a row.
As I've mentioned before, the bank has been tagged in the past for being the worst in the mortgage-servicing business, thanks largely to Countrywide. But the bank is making a huge effort to turn around its lousy customer service image, for which it deserves kudos -- and time to get it right.