[blind-democracy] Bank Of America Closes Less lucrative Accounts

  • From: "Bob Hachey" <bhachey@xxxxxxxxxxx>
  • To: <blind-democracy@xxxxxxxxxxxxx>
  • Date: Mon, 05 Oct 2015 18:00:39 -0400

Hi all,

Check out this disgusting behavior by Bank of America. WE know that BOA and
other large financial institutions hate new regulations that were passed
after the depression of 2008. I guess this is part of how they are fighting
back.

Seems that we need much more regulation to reign in the power of these evil
bastards.

Bob Hachey



https://www.bostonglobe.com/business/2015/10/01/bank-america-dumping-small-t
owns-and-cities-clients/7mDXv3M1StuZOBcwtFCuSN/story.html



Bank of America drops some small towns and cities

Cost of new regulations may be a key factor



By

More Stories by Beth Healy

Globe Staff October 02, 2015



Large banks have been warning corporate clients over the past year that the
cost of some deposit accounts is rising.



Chuck Burton/Associated Press



Large banks have been warning corporate clients over the past year that the
cost of some deposit accounts is rising.



The banker went to see Fitchburg Treasurer Calvin Brooks at City Hall early
in September with surprising news: Bank of America no longer wants the
city's

$11 million in business.



The Central Massachusetts city had kept its deposit accounts with Bank of
America and its predecessor institutions since 1964, starting with Worcester

County National, Brooks said.



Now, it has 90 days to move on.



"They are no longer looking for our business,'' Brooks said, echoing a
message sent to treasurers of smaller cities and towns and even school
systems across

the state - and perhaps the country - as the Charlotte, N.C., banking
behemoth focuses on larger customers.



The bank's Sept. 3 break-up letter is to the point. Giving three months
notice, it says, "We hope this period gives you sufficient time to rearrange
your

banking needs before the accounts are closed and these services are
terminated.''



Bank of America Merrill Lynch spokeswoman Kristen Kaus declined to comment
on the decision to drop the municipalities.



"We are committed to the public sector,'' Kaus said.



'It's very much a hardship for the municipalities.' John Nunez Treasurer of
Fall River



Quote Icon



The changes come at a time when large banks are facing new regulations that
make some deposit accounts less lucrative. Others affected in Massachusetts

include the City of Fall River and Blue Hills Regional Technical School in
Canton.



Fall River Treasurer John Nunes said the 90-day notice was barely enough
time to interview a handful of other banks and make a switch. The city has
about

$4 million in deposits with Bank of America, he said, including accounts for
retirement payments and certain school expenses.



"It's very much a hardship for the municipalities,'' Nunes said. He said his
Bank of America representative told him "this was a nationwide issue."



Several treasurer groups contacted around the country had not yet heard of
the bank's cutbacks among municipal clients. But many said they were
anticipating

changes by large banks because of the new regulations.



Gerard Cassidy, a banking analyst and managing director with RBC Capital
Markets in Portland, Maine, said the nation's largest banks are scaling back
their

less attractive businesses.



"Businesses that pre-financial crisis were profitable or marginally
profitable are in some cases much less profitable, because of these new
regulations,"

he said.



Large banks have been warning corporate clients over the past year that the
cost of some deposit accounts is rising. Regulators are requiring banks to

set aside more reserves for certain deposits, in order to have sufficient
funds on hand in case of large withdrawals in a time of crisis, as happened
when

financial markets collapsed in 2008.



Bank of America says on its "public sector" Web page that it has
"relationships" with 96 percent of state governments, 88 percent of the top
50 US cities,

and 82 percent of the top 50 counties.



With smaller municipalities, Cassidy said, Bank of America may simply be
making a calculated decision about a low-margin business.



"It's disruptive in that it's rather abrupt,'' said Brooks, the Fitchburg
treasurer. Fortunately, he said, several other banks are interested in
bidding

on the city's business.



He's reviewing proposals from other banks for the city's business and
expects to decide by the end of this week. He asked Bank of America for an
extension

beyond the three months because transitioning all the city's accounts - for
payroll, expenses and the retirement system's operating account - to a new

bank will take four to six weeks, he said.



At Blue Hills Regional, Superintendent James Quaglia said the bank's
decision was a surprise to the school system, which has an annual budget of
about

$18 million.



"It didn't come with any warning,'' Quaglia said. But Blue Hills has now
hired a local institution, the Bank of Canton.



"It allowed us to establish a relationship with a more local entity who was
more than happy to have our business,'' he said.



Beth Healy can be reached at

beth.healy@xxxxxxxxx.



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