- Dion Ogust
This story is both personal and policy. I leave it up to you to determine if the personal simply prompted the issue or if it has influenced my views.
A bit more than a quarter century ago, when we'd first moved to Woodstock, we rented a house from two women reputed to be off studying the Upanishads in Sanskrit. The Sicilian storyteller next door had a dream about a house for sale on the dirt road just below us. It proved to be accurate and appealing.
We went to the bank in town to ask for a mortgage.
Since I was, most recently, a novelist and a freelance director-producer of political commercials and my wife was an actress who moonlighted as a PI, I was not very hopeful. As I handed our income tax statements to the banker, I did my best to explain, "We're freelance people. It's my accountant's job to report everything, but also to make it look like I make as little as possible. Unfortunately, for this circumstance, he's pretty good at it."
Much to my surprise, the bank officer said, "Oh, we understand. This is Woodstock. We deal with a lot of people like yourselves."
We got the mortgage. We bought our first home.
We sold it. Paid off the mortgage. Got a bigger place. Paid off that mortgage.
Somewhere along the line we discovered the mortgage's more flexible, looser, hipper cousin, the home equity loan, a line of credit backed by property.
For the next 25 years, we went merrily along using a home equity line as our primary tool for managing financial issues. We made major renovations on the house, paid our credit cards on time, bought our cars for cash, and put both kids through college without student loans.
The bank was originally Norstar, a regional group based in Buffalo. A few years later, it became Fleet, which merged with Bank of Boston in 1999, then was taken over by Bank of America in 2004.
We kept banking at the same location as if it was the same place, merely changing its logo.
Our current home equity loan, the semi-organic continuation of the older ones, had a twist in its tale. After 10 years it would turn into a standard mortgage. With regular scheduled payments of principle and no flexibility. The obvious thing to do was go get a new one, pay off the current one, and start fresh.
We'd done business at the location for 25 years, with BoA itself for 10, never been late, never had a problem, had no unpaid debts in either of our entire life histories, and our only outstanding debt was the home equity loan itself.
The first cheery, caring bank officer, said, "Let me put you on the phone with one of our home equity line specialists." As if that was someone who knew special things in a special way. The specialist was in Florida and couldn't find Woodstock, NY, in her computer real estate evaluation program. She promised to send an application but never did.
We started again. The different, friendly bank officer said he would be there to guide us through.
I began to see that the changes were more than cosmetic.
Once upon a time our bank officers had been local—I'd see them in the rescue squad, at the local school, at little league—and they had some longevity. Now, I never saw them outside the bank and rarely seemed to last in the bank for more than a year. A cynical friend suggested they were rotated out so they would never build up relationships with their customers as people.
The bigger change was that they were no longer really officers. They had no authority. They had become essentially like the greeters at Walmart, there to smile corporately and point customers to where the products were.
The application was actually handled by a "group" in Connecticut. They could not send emails with any content. When I told this to the current head of the branch, she said, "Huh?" (I paraphrase her facial expression of ignorant befuddlement.) They could only send emails that announced that a secret message was waiting for me in a secure website. To access it I had to download a program that still sends me a little boxed notice at least twice a day to inform me that
"To view this web content, you need to install the Java Runtime Environment."
They would ultimately turn us down.
Fortunately, we had also applied to another bank, one that was actually local, Ulster Savings & Loan, where we spoke directly to humans who made the decisions and who made an effort to get us our loan.
One customer, one loan, one bank says no, the other says yes. Is it possible, even likely, that this was an individual, random event?
It turns out to have been symptomatic. Friends at the Small Business Administration instantly and adamantly proclaimed, "Bank of America is the worst place to go." Notorious for stringing out the process, for not giving loans, especially to new and small businesses, and to revoking lines of credit suddenly and arbitrarily. They recommended several local banks, Ulster among them.
We could say, at that point, that one bank is entitled to be a sort of son of a bitch bank while another is entitled to be a thoughtful, considerate institution actually involved in the community.
But are they?
Bear in mind that Bank of America went bankrupt due to greed and ineptitude. It exists only because of federal bailouts. At least $45 billion. It profits due to "quantitative easing." The pseudo-technocratic name implies that it eases a greater quantity of liquid capital into the economy. In practice it means letting the biggest—and only the biggest—banks borrow from the Fed for nearly zero interest, a practice that makes it almost impossible not to make money, and brings the bailout numbers into the trillions.
The hope is that the banks will do good things with that money. What did BoA do with all this citizen funded largess? In 2010, they claimed a pretax loss of $5.4 billion. That got them a $1 billion tax refund. At the same time, they paid themselves $35 billion in bonuses and compensation.
In 2013, David Dayen wrote in Salon "Bank of America's mortgage servicing unit systematically lied to homeowners, fraudulently denied loan modifications, and paid their staff bonuses for deliberately pushing people into foreclosure." Matt Taibbi also compiled a list of BoA crimes and corrupt practices in his article "Bank of America: Too Crooked to Fail" in Rolling Stone.
I feel I should have left Bank of America for a local bank long ago. I didn't because it didn't seem worth the effort and, worse, because I felt like it wouldn't matter. That the big banks are so big and so powerful that our individual actions are pointless. Yet it would be great if somehow enough of us felt differently about it. Even if it's true that our actions have no more impact than fleas biting an elephant, maybe we should act anyway.