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Comment on Bank of America and Countrywide

Adam R.'s picture

Posted May 15, 2009

Today (Friday, May 15th) is the last day to comment on the proposed re-organization of Bank of America, specifically with how it introduces Countrywide into is larger corporate framework.

The address for comment is:

The comments are due by 5 pm, EST.

Comments should focus on how the re-organization will accommodate the needs of the public.  Its an important opportunity, and while the regulatory invitation is not specific in what will be reorganized, it is safe to bet that it involves Countrywide and perhaps First Franklin (a subprime lending operation owned by National City and later by Merrill Lynch).

Comments could include concerns about credit cards, about consumer protections, about small business lending, or about the lack of publicly-available data to help regular people participate in this change.  Moreover, there are safety and soundness issues relative to why B of A needed so much money to make up its capital requirements.

Here is a form letter.

Adam M. Drimer
Assistant Vice President
Federal Reserve Bank of Richmond
P. 0. Box 27622
Richmond, VA 23261
RE:   Bank of America Corporation, Charlotte, North Carolina, and NB
Holdings Corporation, Charlotte, North Carolina; to acquire 100 percent
of the voting shares and thereby indirectly acquire Bank of America
North Carolina, National Association, Charlotte, North Carolina (in

Dear Mr. Drimer,   This letter is to comment on the proposed reorganization of Bank of America and to request an extension of time so that we can understand the purpose of this reorganization.  I represent (INSERT NAME OF ORGANIZATION AND DESCRIPTION HERE).  As Bank of America seeks internal reorganization it is out hope that this will facilitate better relationships with it customers and the communities and neighborhoods impacted by its decisions.   We have a number of concerns related to Bank of America's business practices that we feel should be addressed before this reorganization is approved.   Bank of America fared poorly on the recent stress test.  We feel this will result in unnecessary and unwarranted reduction of credit to small businesses across the country and will contribute to increased unemployment throughout the country, leading to increased foreclosures.

Bank of America has cut off lines of credit to small business owners who have not defaulted on their payments who have excellent credit but serve tough markets.  We have seen a number of small locally based homebuilders who could benefit from the ARRA but who need that line of credit to pay employees until the contracts are signed and payment for the work comes in.

We are concerned that this "reorganization" does not address the performance of Bank of America, Countrywide, First Franklin, Home Service Loans and Wilshire as it related to home retention and loan modifications.  There are clear inefficiencies and we believe intentional efforts to stall home retention efforts for borrowers who are trying to avoid foreclosure.  It takes 10-30 days to get information that has been faxed to these divisions of BOFA into the system.  This delays the ability of housing counselors to keep delinquencies and retention costs manageable for their clients and to ensure that a SUSTAINABLE workout option is available.    We want to know how this "reorganization" will address the following questions.

How will this restructuring of Bank of America ensure fair and equitable capital flows to low-to-mod and communities of color?

How will this restructuring of Bank of America address sustainable homeownership for low-to-mod and communities of color?

How can we ensure that Bank of America develops models for pricing, securitizations, and regulatory/economic capital that considers on the front-end the impact on low-to-mod and communities of color and that efforts are recorded to show they mitigated any disproportionate impact on these communities.

Thank you for your consideration of this comment.

The more comments, the better.  Each comment counts as one additional concern.  Quantity is more important than depth.